Exhibit 10.3
THE WARRANTS AND THE ORDINARY SHARES TO BE
ISSUED PURSUANT TO THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER ANY FEDERAL OR
STATE SECURITIES LAWS AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE
DISPOSED OF ABSENT REGISTRATION UNDER
THE SECURITIES ACT OF 1933 AND ANY
APPLICABLE STATE SECURITIES LAWS UNLESS AND
UNTIL THE HOLDER HEREOF PROVIDES (i)
INFORMATION REASONABLY NECESSARY TO CONFIRM
THAT SUCH REGISTRATION IS NOT REQUIRED OR
(ii) AN OPINION OF COUNSEL TO THE
EFFECT THAT SUCH REGISTRATION IS NOT
REQUIRED.
WARRANT NO. 2005-___
________________, 2005
For the Purchase of
___________ shares of
Common Stock of The Beard Company
FOR VALUE
RECEIVED, THE BEARD COMPANY, an Oklahoma corporation (the
"Corporation"), hereby grants to
_________________________, or his registered
assigns (collectively the "Holder"), the
right (the "Warrants") to purchase at
any time before the Expiration Date (as
hereafter defined)
__________________________ (________) duly
authorized, validly issued, fully
paid and non-assessable shares (the
"Warrant Shares") of the Corporation's
Common Stock, $.0006665 par value (the
"Common Stock"), at the Exercise Price
(as hereafter defined) and on the terms and
conditions herein set forth. The
number of Warrant Shares and the Exercise
Price will be subject to adjustment as
provided in this Warrant. The Warrants are
being issued pursuant to the terms of
the Confidential Private Placement
Memorandum in connection with the Company's
offering of $2,100,000 of 12% Convertible
Subordinated Notes due February 15,
2010, as Amended December 29, 2004.
This Warrant is
issued subject to the following terms and conditions:
1. Exercise of Warrant. The Warrants are
exercisable at the option of the Holder
in whole or in part at any time prior to
the Expiration Date by the delivery to
the Corporation of written notice of the
exercise of the Warrants specifying the
number of Warrant Shares to be acquired,
surrender of this Warrant to the
Corporation and satisfaction of the
Exercise Price for the Warrant Shares to be
acquired through such exercise. The
Warrants will be deemed exercised
immediately prior to the close of business
on the day that all of the foregoing
requirements for the exercise of the
Warrants are completed and the person
entitled to receive the Warrant Shares will
be treated for all purposes as the
holder of record of such Warrant Shares at
such time including, without implied
limitation, the right to vote, receive
dividends and to receive distributions
for which the record date falls on or after
such date. As promptly as possible
after such date (in any event within five
(5) business days) the Corporation
will deliver to the Holder a stock
certificate evidencing the Warrant Shares
covered by the exercise. In the case of an
exercise for less than all the
Warrant Shares the Corporation will cancel
this Warrant on the surrender hereof
and will execute and deliver a new Warrant
of like tenor for the balance of the
unexercised Warrant Shares within such five
(5) day period. If an exercise of
all or part of the Warrants is to be made
in connection with a registered public
offering or a transaction described in
paragraph 10 of this Warrant, the
exercise of the Warrants may, at the
election of the Holder, be conditioned on
the consummation of the public offering or
other transaction under paragraph 10
of this Warrant. In that case the exercise
will not be deemed to be effective
until the consummation of the specified
condition.
2. Term. The Warrants may be exercised in
full or in part at any time on or
before 11:59 p.m. Oklahoma City, Oklahoma,
time on ______________, 2010 (the
"Expiration Date"). To the extent not
exercised prior to the Expiration Date,
the Warrants and all of the rights of the
Holder hereunder will expire and
terminate on such date without any action
or notice by the Corporation.
3. Exercise Price. On the exercise of the
Warrants, the Holder agrees to pay to
the Corporation for the Warrant Shares
purchased by the Holder pursuant to the
terms of this Warrant an amount (the
"Exercise Price") multiplied by the number
of Warrant Shares at the time of
determination. The Exercise Price is $1.00 per
Warrant Share (as hereafter defined). The
Exercise Price is subject to
adjustment pursuant to the terms of this
Warrant. The Exercise Price shall be
paid in lawful money of the United States
of America.
4. Representations, Warranties and
Covenants. The Corporation represents to and
warrants, covenants and agrees with the
Holder as follows:
4.1 Reservation of Shares. At all
times while the Warrants are outstanding
the Corporation will reserve out of the Corporation's authorized
but
unissued shares of Common Stock, free from preemptive rights
and
solely for the purpose of effecting the exercise of the Warrants,
a
sufficient number of shares of Common Stock to provide for the
exercise of the Warrants and all other options, warrants and
convertible securities of the Corporation. The Corporation will
take
all such actions necessary to assure that all such Warrant Shares
may
be issued without violation of any applicable law, governmental
regulation or requirements of any domestic securities exchange
or
automated quotation system on which the shares of Common Stock
are
listed or quoted (except for official notice of issuance, which
will
be immediately delivered by the Corporation upon each such
issuance).
The Corporation will take all necessary actions to assure that all
of
the Warrant Shares are authorized, approved for and listed on
any
national
securities exchange or quotation system on which the
Corporation's shares of Common Stock are listed or quoted. The
Corporation will not take any action that would cause the number
of
authorized but unissued shares of Common Stock to be less than
the
number of shares of Common Stock required to be reserved for
issuance
on exercise of the Warrants.
4.2 Valid Issuance. All Warrant Shares
that may be issued on exercise of
the Warrants will be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens, charges and
encumbrances
on issuance by the Corporation. The Corporation will not take
any
action or fail to take any action that will cause a contrary
result
(including, without limitation, any action that would cause the
Exercise Price then in effect to be less than the par value of
the
Common Stock).
4.3 Cooperation. The Corporation will:
(a) not close its books against the
transfer of the Warrants or of any Warrant Shares in any manner
which
interferes with the timely exercise of the Warrants; (b) assist
and
cooperate with the Holder should the Holder be required to make
any
governmental filings or obtain any governmental approvals prior to
or
in connection with any exercise of the Warrants (including,
without
limitation, making any filings required to be made by the
Corporation).
4.4 Authority. The Corporation has
taken all necessary action to authorize
the execution and delivery of this Warrant and the issuance of
the
Warrant Shares on the exercise of the Warrants. This Warrant is
a
valid, binding and enforceable obligation of the Corporation
subject
to applicable bankruptcy, insolvency, fraudulent conveyance,
moratorium and similar laws now or hereafter in effect relating
to
creditors' rights and remedies generally. The execution, delivery
and
performance of this Warrant will not violate: (a) any provision of
the
organizational documents or charter of the Corporation; (b) any
order,
writ, injunction or decree of any court, administrative agency
or
governmental body applicable to the Corporation or the Common
Stock;
or (c) any contract, lease, note, bond, mortgage or other agreement
to
which the Corporation is a party, by which the Corporation is bound
or
to which any of the Corporation's assets are subject.
4.5 Capitalization. As of the date of
this Warrant: the Corporation's
authorized capital stock consists of fifteen million
(15,000,000)
shares of Common Stock, par value $0.0006665 per share, and
five
million (5,000,000) shares of preferred stock, par value $1.00
per
share. As of the date of this Warrant the only shares of capital
stock
issued and outstanding are 4,969,565 fully paid and
non-assessable
shares of Common Stock and 27,838 shares of Preferred Stock.
4.6 Office. The Corporation will
maintain an office for the purposes
specified in this Warrant (the "Warrant Office"). The Warrant
Office
will initially be the Corporation's offices at Suite 320, 5600
North
May Avenue, Oklahoma City, Oklahoma 73112 and may subsequently be
any
other office of the Corporation or any transfer agent for the
Common
Stock in the continental United States as to which written notice
has
previously been given to the Holder. The Corporation will maintain
at
the Warrant Office a register for the Warrants in which the
Corporation will record the name and address of the person in
whose
name this Warrant has been issued. The Holder will be able to take
any
action permitted in this Warrant including, without implied
limitation, the exercise or transfer of the Warrants.
5. Restrictive Legend. The Warrants are
being acquired and any Warrant Shares to
be acquired by the Holder pursuant to this
Warrant (collectively, "Securities")
will be acquired for investment for the
Holder's own account and not with a view
to, or for resale in connection with, any
distribution of such Securities within
the meaning of the Securities Act of 1933,
as amended (the "Securities Act").
The Securities will not be sold,
transferred or otherwise disposed of without
registration under the Securities Act and
state securities laws or qualification
for exemptions therefrom. The Holder agrees
that each certificate evidencing the
Warrant Shares may be inscribed with a
legend to the foregoing effect, which
legend will be as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
SOLELY
FOR INVESTMENT PURPOSES AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY
STATE. THE SHARES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
OTHERWISE
DISPOSED OF UNLESS AND UNTIL SUCH SHARES ARE FIRST REGISTERED
UNDER
THE SECURITIES ACT OF 1933, ALL APPLICABLE STATE SECURITIES LAWS
AND
ALL RULES AND REGULATIONS PROMULGATED THEREUNDER OR UNLESS AND
UNTIL
THE HOLDER
HEREOF PROVIDES (i) INFORMATION REASONABLY NECESSARY TO
CONFIRM THAT SUCH REGISTRATION IS NOT REQUIRED OR (ii) AN OPINION
OF
COUNSEL TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
The Holder agrees that the Corporation may
place a stop transfer order with the
Corporation's transfer agent, if any, with
respect to any noncomplying transfer
of the certificates representing any
Warrant Shares, which stop transfer order
will be removed by the Corporation on
compliance with the foregoing.
6. Registration Rights. The Holder and any
other holder of Warrant Shares will
have the registration rights provided for
in Exhibit A hereto.
7. Anti-Dilution Adjustments. In order to
prevent dilution of the rights granted
with respect to the Warrants, the Exercise
Price and the number of Warrant
Shares obtainable on the exercise of a
Warrant are subject to adjustment from
time to time as follows:
7.1 Issuance of Common Stock. If and
whenever on or after the date of this
Warrant the Corporation issues or sells, or in accordance with
paragraph 7.2 of this Warrant is deemed to have issued or sold,
any
shares of Common Stock for a consideration per share less than
the
Exercise Price in effect immediately prior to such time, then
immediately on such issuance or sale the Exercise Price will be
reduced to the new Exercise Price determined by dividing:
7.1.1 the sum of (a) the product derived by multiplying the
Exercise
Price in effect immediately prior to such issue or sale times
the
number of shares of Common Stock Deemed Outstanding (as
hereafter
defined) immediately prior to such issue or sale, plus (b) the
consideration, if any, received by the Corporation on such
issuance or sale, divided by
7.1.2 the number of shares of Common Stock Deemed Outstanding
immediately after such issuance or sale.
7.2 Effect on Exercise Price of
Certain Events. For purposes of
determining the adjusted Exercise Price under paragraph 7.1 of
this
Warrant, the following will be applicable:
7.2.1 Issuance of Rights or Options. If the Corporation in any
manner
grants, issues or sells any Options (as hereafter defined),
other
than the Corporation's employee or director benefit plans, and
the price per share for which shares of Common Stock are
issuable
on the exercise of
such Options (or on the conversion or exchange
of any Convertible Securities (as hereafter defined) issuable
on
the exercise of such Options) is less than the Exercise Price
in
effect immediately prior to the time of the grant, issuance or
sale of such Options, then the total maximum number of shares
of
Common Stock issuable on the exercise of such Options (or on
the
conversion or exchange of the total maximum amount of such
Convertible Securities issuable on the exercise of such
Options)
will be deemed to be outstanding and to have been issued and
sold
by the Corporation at the time of the granting or sale of such
Options for such price per share. For purposes of this
paragraph,
the "price per share for which shares of Common Stock are
issuable on exercise of such Options or on the conversion or
exchange of any Convertible Securities" is determined by
dividing
(a) the total amount, if any, received or receivable by the
Corporation as consideration for the granting or sale of such
Options, plus the minimum aggregate amount of additional
consideration payable to the Corporation on the exercise of all
such Options, plus in the case of such Options which relate to
Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable to the Corporation on
the issuance or sale of such Convertible Securities and the
conversion or exchange thereof, by (b) the total maximum number
of shares of Common Stock issuable on exercise of such Options
or
on the conversion or exchange of all such Convertible
Securities
issuable on the exercise of such Options. No further adjustment
of the Exercise Price will be made on the actual issuance of
such
shares of Common Stock or of such Convertible Securities on the
exercise of such Options or on the actual issuance of shares of
Common Stock as a result of the conversion or exchange of such
Convertible Securities.
7.2.2 Issuance of Convertible Securities. If the Corporation in
any
manner issues or sells any Convertible Securities and the price
per share for which shares of Common Stock are issuable on
conversion or exchange thereof is less than the Exercise Price
in
effect immediately prior to the time of such issue or sale,
then
the maximum number of shares of Common Stock issuable on
conversion or exchange of such Convertible Securities will be
deemed to be outstanding and to have been issued and sold by
the
Corporation at the time of the issue or sale of such
Convertible
Securities for such price per share. For the purposes of this
paragraph, the "price per share for which shares of Common
Stock
are issuable on conversion or exchange thereof" is determined
by
dividing (a) the total amount received or receivable by the
Corporation as consideration for the issue or sale of such
Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Corporation on
the conversion or exchange thereof, by (b) the total maximum
number of shares of Common Stock issuable on the conversion or
exchange of all such Convertible Securities. No further
adjustment of the Exercise Price will be made on the actual
issue
of such shares of Common Stock on conversion or exchange of
such
Convertible Securities, and if any such issue or sale of such
Convertible Securities is made on exercise of any Options for
which adjustments of the Exercise Price had been or are to be
made pursuant to other provisions of this paragraph 7.2, no
further adjustment of the Exercise Price will be made by reason
of such issue or sale.
7.2.3 Change in Option Price or Conversion Rate. If the purchase
price
provided for in any Options, the additional consideration, if
any, payable on the issue, conversion or exchange of any
Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exchangeable for shares of
Common Stock changes at any time, the Exercise Price in effect
at
the time of such change will be adjusted immediately to the
Exercise Price which would have been in effect at such time had
such Options or Convertible Securities still outstanding
provided
for such changed purchase price, additional consideration or
changed conversion rate, as the case may be, at the time
initially granted, issued or sold and the number of shares of
Common Stock issuable hereunder will be correspondingly
adjusted.
For purposes of this paragraph 7.2, if the terms of any Option
or
Convertible Security which was outstanding as of the date of
this
Warrant are changed in the manner described in the immediately
preceding sentence, then such Option or Convertible Security
and
the shares of Common Stock deemed issuable on exercise,
conversion or exchange thereof will be deemed to have been
issued
as of the date of such change. Notwithstanding the foregoing no
such change will at any time cause the Exercise Price hereunder
to be increased.
7.2.4 Expired Options and Securities. On the expiration of any
Option
or the termination of any right to convert or exchange any
Convertible Securities without the exercise of such Option or
right, the Exercise Price then in effect and the number of
shares
of Common Stock acquirable hereunder will be adjusted
immediately
to the Exercise Price and the number of shares which would have
been in effect at the time of such expiration or termination
had
such Option or
Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination, never been
issued. For purposes of this paragraph 7.2, the expiration or
termination of any Option or Convertible Security which was
outstanding on or before the date of execution of this Warrant
will not cause the Exercise Price hereunder to be adjusted
unless, and only to the extent that, a change in the terms of
such Option or Convertible Security caused it to be deemed to
have been issued after the date of this Warrant.
7.2.5 Calculation of Consideration Received. If any shares of
Common
Stock, Options or Convertible Securities are issued or sold or
deemed to have been issued or sold for cash, the consideration
received therefor will be deemed to be the amount received by
the
Corporation therefor. In case any shares of Common Stock,
Options
or Convertible Securities are issued or sold for consideration
other than cash, the amount of the consideration other than
cash
received by the Corporation will be the fair value of such
consideration, except where such consideration consists of
securities, in which case the amount of consideration received
by
the Corporation will be the Current Market Price thereof as of
the date of receipt. In case any shares of Common Stock,
Options
or Convertible Securities are issued to the owners of the
non-surviving entity in connection with any merger in which the
Corporation is the surviving entity the amount of consideration
therefor will be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is
attributable to such shares of Common Stock, Options or
Convertible Securities, as the case may be. The fair value of
any
consideration other than cash or securities will be determined
at
the reasonable discretion of the board of directors of the
Corporation consistent with the value assigned for generally
accepted accounting principles for purposes of financial
reporting. Notice of such determination will be given to the
Holder.
7.2.6
Integrated Transactions. In case any Option or Convertible
Security is issued in connection with the issue or sale of
other
securities of the Corporation, together comprising one
integrated
transaction in which no specific consideration is allocated to
such Options or Convertible Security by the parties thereto,
the
Options or Convertible Security will be deemed to have been
issued for consideration determined at the reasonable
discretion
of the board of directors of the Corporation consistent with
the
value assigned for purposes of generally accepted accounting
principles. Notice of such determination will be given to the
Holder.
7.2.7 Treasury Shares. The number of shares of Common Stock
outstanding at any given time will not include shares of Common
Stock owned or held by or for the account of the Corporation or
any subsidiary, and any issuance or disposition of any shares
of
Common Stock so owned or held will be considered an issuance or
sale of shares of Common Stock.
7.2.8 Record Date. If the Corporation takes a record of the holders
of
shares of Common Stock for the purpose of entitling them (a) to
receive a dividend or other distribution payable in shares of
Common Stock, Options or in Convertible Securities or (b) to
subscribe for or purchase shares of Common Stock, Options or
Convertible Securities, then such record date will be deemed to
be the date of the issue or sale of the shares of Common Stock
deemed to
have been issued or sold on the declaration of such
dividend or the making of such other distribution or the date
of
the granting of such right of subscription or purchase, as the
case may be.
7.3 Stock Splits and Reverse Splits.
In the event that the Corporation at
any time after the date of this Warrant subdivides its
outstanding
shares of Common Stock into a greater number of shares (by
stock
split, stock dividend, recapitalization or otherwise), the
Exercise
Price in effect immediately prior to such subdivision will be
proportionately reduced and the number of Warrant Shares
purchasable
on the exercise of the Warrants immediately prior to such
subdivision
will be proportionately increased. Conversely, in the event that
the
outstanding shares of Common Stock at any time are combined into
a
smaller number of shares (by reverse stock split or otherwise),
the
Exercise Price in effect immediately prior to such combination will
be
proportionately increased and the number of Warrant Shares
purchasable
on the exercise of the Warrants immediately prior to such
combination
will be proportionately reduced.
7.4 Certain Events. If any event
occurs of the type contemplated by the
provisions of this paragraph 7 but not expressly provided for by
such
provisions (including, without limitation, the granting of
stock
appreciation rights, phantom stock rights or other rights with
equity
features, other than the Corporation's employee or director
benefit
plans), then the Corporation's board of directors will make an
appropriate adjustment in the Exercise Price and the number of
shares
of Common Stock obtainable on exercise the Warrants so as to
protect
the rights of the holders of the Warrants. Notwithstanding
anything
herein to the contrary, no such adjustment will increase the
Exercise
Price or decrease the number of shares of Common Stock as
otherwise
determined pursuant to this paragraph 7.
7.5 Notice of Adjustment. Whenever the
Exercise Price or the number of
Warrant Shares issuable on the exercise of the Warrants will be
adjusted as herein provided, or the rights of the Holder hereof
will
change by reason of other events specified herein, the
Corporation
will compute the adjusted Exercise Price and the adjusted number
of
Warrant Shares in accordance with the provisions hereof and
will
prepare an Officer's Certificate setting forth the adjusted
Exercise
Price and the adjusted number of Warrant Shares issuable on the
exercise of the Warrants or specifying the other shares of
stock,
securities or assets receivable as a result of such change in
rights,
and showing in reasonable detail the facts and calculations on
which
such adjustments or other changes are based. The Corporation
will
promptly cause to be mailed to the Holder copies of such
Officer's
Certificate together with a notice stating that the Exercise Price
and
the number of Warrant Shares purchasable on exercise of the
Warrants
have been adjusted and setting forth the adjusted Exercise Price
and
the adjusted number of Warrant Shares purchasable on the exercise
of
the Warrants.
7.6 Exceptions to Anti-Dilution
Adjustment. Notwithstanding anything to
the contrary contained in this Warrant, there will be no adjustment
in
the Exercise Price or the number of Warrant Shares obtainable
on
exercise of the Warrants as a consequence of the issuance by
the
Corporation of: (a) any option, warrant, convertible security or
other
right to acquire shares of Common Stock outstanding or in effect as
of
the date of this Warrant and not amended after the date of this
Warrant; (b) any options, stock purchase rights or other rights
to
acquire shares of Common Stock of the Corporation on exercise
of
options granted or that may be granted under the Corporation's
compensatory stock option plans at an exercise price no less than
the
Current Market Price on the date of issuance; or (c) the issuance
of
shares of Common Stock as a result of the exercise of any of
the
foregoing.
7.7 Definitions. For purposes of this
Warrant the following terms will
have the designated meanings: (a) "shares of Common Stock
Deemed
Outstanding" means at any given time, the number of shares of
Common
Stock actually outstanding at such time, plus the number of shares
of
Common Stock deemed to be outstanding pursuant to paragraph 7
hereof
regardless of whether the Options or Convertible Securities are
actually exercisable at such time; (b) "Convertible Securities"
means
any stock or securities (directly or indirectly) convertible into
or
exchangeable for shares of Common Stock; and (c) "Options" means
any
rights or options to subscribe for or purchase shares of Common
Stock
or Convertible Securities.
7.8 Current Market Price. For purposes
of this Warrant the "Current Market
Price" means: (a) with respect to a security which is traded on
an
organized national exchange or market the average of the last bid
and
asked prices as quoted on the applicable exchange or market for
the
immediately preceding twenty (20) trading days; and (b) if the
security is not traded on such an organized exchange or market,
the
price per
share of the security as determined in good faith by the
Corporation's board of directors and set forth in a notice of
such
valuation to the Holder.
8. Reorganizations and Asset Sales. If any
recapitalization, reorganization or
reclassification of the capital stock of
the Corporation, or any consolidation,
merger or share exchange of the Corporation
with another person, or the sale,
transfer or other disposition of all or
substantially all of its assets to
another person will be effected in such a
way that a holder of shares of Common
Stock of the Corporation will be entitled
to receive capital stock, securities
or assets with respect to or in exchange
for shares of Common Stock, then the
following provisions will apply:
8.1 Replacement Instrument. As a
condition of such recapitalization,
reorganization, reclassification, consolidation, merger, share
exchange, sale, transfer or other disposition (except as
otherwise
provided below in paragraph 8.2) lawful and adequate provisions
in
form and substance reasonably satisfactory to the holders of a
majority of the Warrants will be made whereby the holders of
Warrants
will thereafter have the right to purchase and receive on the
terms
and conditions specified in this Warrant and in lieu of or addition
to
(as the case may be) the Warrant Shares immediately theretofore
receivable on the exercise of the rights represented hereby,
such
shares of capital stock, securities or assets as may be issued
or
payable with respect to or in exchange for a number of
outstanding
shares of such shares of Common Stock equal to the number of
Warrant
Shares immediately theretofore so receivable had such
recapitalization, reorganization, reclassification,
consolidation,
merger, share exchange or sale not taken place. In any such
case
appropriate provision (in form and substance reasonably
satisfactory
to the holders of majority of the Warrants) will be made with
respect
to the rights and interests of the holders of the Warrants to the
end
that the provisions hereof (including, without limitation, in the
case
of
any such consolidation, merger or sale in which the successor
entity or purchasing entity is other than the Corporation, an
immediate adjustment of the Exercise Price to the value for the
shares
of Common Stock reflected by the terms of such consolidation,
merger
or sale, and a corresponding immediate adjustment in the number
of
shares of Common Stock acquirable and receivable on exercise of
the
Warrants, if the value so reflected is less than the Exercise Price
in
effect immediately prior to such consolidation, merger or sale)
will
thereafter be applicable, as nearly as possible, in relation to
any
shares of capital stock, securities or assets thereafter
deliverable
on the exercise of the Warrants.
8.2 Assumption. The Corporation will
not effect any such consolidation,
merger, share exchange, sale, transfer or other disposition
unless
prior to or simultaneously with the consummation thereof the
successor
person (if other than the Corporation) resulting from such
consolidation, share exchange or merger or the person purchasing
or
otherwise acquiring such assets will have assumed by written
instrument executed
and mailed or delivered to the Holder hereof at
the last address of the Holder appearing on the books of the
Corporation, (a) the obligation to deliver to the Holder such
shares
of capital stock, securities or assets as, in accordance with
the
foregoing provisions, the Holder may be entitled to receive, and
(b)
all other liabilities and obligations of the Corporation
hereunder.
The foregoing will be performed by issuing a new warrant identical
to
the terms of this Warrant revised to reflect the new parties
thereto,
a provision indicating the replacement nature of the new warrant
and
any modifications in Exercise Price and number of shares of stock
or
equity interests obtainable on the exercise of the new warrant
as
provided herein.
9. Notices to Holder. If at any time the
Corporation proposes to:
9.1 declare any dividend on its shares
of Common Stock payable in capital
stock or make any dividend or other distribution (including
cash
dividends) to the holders of the shares of Common Stock;
9.2 offer for subscription pro rata to
all of the holders of the shares of
Common Stock any additional shares of capital stock of any class
or
other rights other than the Series A Notes or Series A
Warrants;
9.3 effect any capital reorganization,
or reclassification of the capital
stock of the Corporation, or consolidation, merger or share
exchange
of the Corporation with another person, or sale, transfer or
other
disposition of all or substantially all of its assets; or
9.4 effect a voluntary or involuntary
dissolution, liquidation or winding
up of the
Corporation,
then, as a
condition to taking any one or more of the foregoing actions
and
in addition to
any other obligation under this Warrant, the Corporation
will give the
Holder: (a) at least thirty (30) days (but not more than 90
days) prior
written notice of the date on which the books of the
Corporation will
close or a record will be taken for such dividend,
distribution or
subscription rights or for determining rights to vote in
respect of such
issuance, recapitalization, reorganization,
reclassification, consolidation, merger, share exchange, sale,
transfer,
disposition,
dissolution, liquidation or winding up, and (b) in the case of
any such
issuance, recapitalization, reorganization, reclassification,
consolidation,
merger, share exchange, sale, transfer, disposition,
dissolution,
liquidation or winding up, at least thirty (30) days (but not
more than 90
days) prior written notice of the date when the same will take
place. Any
notice under foregoing clause (a) will specify the date on
which
the holders of
shares of Common Stock will be entitled to any such
dividend,
distribution or subscription rights, and any notice under
foregoing clause
(b) will specify the date on which the holders of shares
of Common Stock
will be entitled to exchange their shares of Common Stock,
as the case may
be, for securities or other property deliverable on such
reorganization,
reclassification, consolidation, merger, share exchange,
sale, transfer,
disposition, dissolution, liquidation or winding up.
10. Fractional Shares. Fractional shares
will not be issued on the exercise of
the Warrants. If the Holder would be
entitled to receive a fractional share, the
Corporation will pay to the Holder an
amount equal to the fractional share
multiplied by the Current Market Price for
one share of shares of Common Stock
less the Exercise Price.
11. Fully Paid Stock; Taxes. The
Corporation covenants and agrees that the
shares of stock represented by each and
every certificate for its shares of
Common Stock to be delivered on the
exercise of the Warrants will be duly
authorized, validly issued and outstanding,
fully paid, nonassessable and free
from all taxes, liens, charges and
encumbrances. The Corporation agrees to pay
when due and payable any and all federal
and state taxes (including, without
limitation, all documentary, stamp,
transfer or other transactional taxes but
excluding income taxes) which may be
payable in respect of the Warrants, any
Warrant Shares or certificates therefor on
the exercise of the Warrants.
12. Notices. Any notice, demand or
communication required or permitted to be
given by any provision of this Warrant will
be in writing and will be deemed to
have been given and received when delivered
personally or by telefacsimile to
the party designated to receive such
notice, or on the date following the day
sent by overnight c
