SUMMIT ENTERPRISES, INC.
OF VIRGINIA
August 14, 1998
Xx. Xxxxx X. Xxxxxx
SpaceDev
0000 Xxxxxxxxx Xxx., Xxxxx 000
Xxx Xxxxx, XX 00000
Dear Xxx:
Enclosed is the AGREEMENT FOR LICENSE AND PURCHASE OF TECHNOLOGY, along with
schedules A and B. We do not have a signed page 11 under Schedule B -- Form of
Warrant. Please send us a signed copy of page 11.
Sincerely,
/s/ Xxxx X. Xxxxxxxx/AH
Xxxx X. Xxxxxxxx
AMV/ayh
Enclosure
0000 Xxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xx 00000
703/490-5355 (local) 703/643-2481 (metro)
AGREEMENT FOR LICENSE AND PURCHASE OF TECHNOLOGY
This agreement (the "Agreement") for the license, purchase and sale of
hybrid rocket motor technology and related engineering and trade secrets is
entered into on this _____ day of August 1998, by and between SPACEDEV, INC., a
Colorado corporation (hereinafter referred to as "SpaceDev"); and Xxxx X.
Xxxxxxxx (hereinafter referred to as "Xxxxxxxx").
X. Xxxxxxxx has acquired certain assets consisting of rocket motor
technology and related models, engineering, drawing, trade secrets and
proprietary information from a company known as AMROC as described on the
attached SCHEDULE A to this Agreement (hereinafter referred to as the
"Technology."
X. Xxxxxxxx desires to license and sell the Technology to SpaceDev and
SpaceDev desires to license and purchase such Technology from Xxxxxxxx pursuant
to the terms of this Agreement.
THEREFORE, the parties hereto agree as follows:
1. PURCHASE AND SALE OF THE TECHNOLOGY.
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1.1. Subject to the terms and conditions hereinafter set forth,
SpaceDev agrees to purchase from Xxxxxxxx and Xxxxxxxx agrees to sell to
SpaceDev all tight, title and interest in the Technology including, but not
limited to all the engineering, drawings, designs, formulas and know-how along
with all equipment and other items of tangible personal property required to
further develop, manufacture, sell or make use of the Technology, and all data,
files, documentation, telephone numbers, computer disks, computer tapes,
computer programs and all other data used in connection with the Technology.
1.2. The sale, conveyance, assignment and transfer of the
Technology shall be free and clear of all liens, encumbrances, liabilities or
obligations.
1.3. Notwithstanding anything to the contrary contained in this
Agreement, the transfer of title to the Technology shall become effective only
upon receipt by Xxxxxxxx of the Consideration (as defined in Section 4 hereof).
1.4. Xxxxxxxx shall be responsible for the payment of any sales
and/or use taxes arising out of the transfer of the Technology. SpaceDev shall
not be responsible for any sales tax, payroll, personal property, occupation,
withholding or similar tax or any taxes of any kind related to Xxxxxxxx'x prior
ownership or use of the Technology.
2. LIABILITIES.
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2.1. SpaceDev shall assume no liabilities in connection with the
Technology.
3. EXCLUSIVE LICENSE.
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3.1. Until the Consideration described in Section 4 below is paid
according to the terms of that section, Xxxxxxxx grants to SpaceDev the
exclusive royalty free right to use, license, sell, apply for patents or
trademarks, market, manufacture and utilize the Technology and any improvements
thereon throughout the world in the sole discretion of SpaceDev (the "License
Rights"). The License Rights may only be canceled pursuant to the termination of
this Agreement as provided in Section 8 hereof.
4. THE CONSIDERATION.
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4.1. In exchange for the license and transfer of Technology as
provided herein, SpaceDev shall pay the following Consideration (the
"Consideration") to Xxxxxxxx:
4.1.1. WARRANTS ON EXECUTION. On the execution of this
Agreement, SpaceDev shall issue to Xxxxxxxx Warrants to purchase twenty-five
thousand (25,000) shares of SpaceDev common stock, par value $.0001 per share
(the "Common Stock").
4.1.2. CONTINUING WARRANTS. For the first three (3) years of
this Agreement, Xxxxxxxx shall receive the greater of the Warrants described in
subparagraphs 4.1.2.1 or 4.1.2.2 below. Commencing with the fourth year of this
Agreement, Xxxxxxxx shall only receive the Warrants described in subparagraph
4.1.2.1 below.
4.1.2.1. REVENUE WARRANTS. A warrant to purchase one
(1) share of Common Stock for each one hundred and twenty-five dollars ($125.00)
in Revenue (as defined herein) earned by SpaceDev from the license, sale, use or
other disposition of the Technology. For purposes of this Agreement, "Revenue"
shall mean the income (as determined pursuant to GAAP) received from the
license, sale, use or other disposition of the Technology whether or not
pursuant to the terms of any oral or written agreement, contract or relationship
(a "Contact") between SpaceDev and a third party in which the Technology is part
of the product or service provided. SpaceDev agrees to set forth in each
Contact, if written, a line item description of each product or service sold and
the price charged for each line item setting out the price for the sale or use
of the Technology. The calculation of Revenue will be completed each calendar
quarter, commencing on the first full calendar quarter after the execution of
this Agreement, based on a review of all Contracts by SpaceDev, and if so
requested, by Xxxxxxxx.
4.1.2.2. ANNUAL WARRANTS. Warrants to purchase
twenty-five thousand (25,000) shares of SpaceDev Common Stock on the first three
(3) annual anniversaries of the execution of this Agreement.
4.2. MAXIMUM CONSIDERATION. The total Consideration paid pursuant
to this Agreement shall not exceed (1) Warrants to purchase three million
(3,000,000) shares of Common Stock, or (ii) six million dollars ($6,000,000) in
Recognized Value. "Recognized Value" shall mean the sum of (a) the cumulative
difference between the Market Price (as defined herein) of the Common Stock and
the Strike Price (as defined herein) for each Warrant then owned by Xxxxxxxx,
and (b) the cumulative difference between the Market Price on the date of
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exercise and the Strike Price for each Warrant previously exercised by Xxxxxxxx.
The parties will compute the Recognized Value each time Warrants are due to be
issued under this Agreement to determine if the Maximum Consideration has been
reached. "Market Price" shall mean the average of the daily closing prices of
the Common Stock on the Nasdaq Stock Exchange or such other national or regional
stock exchange or over the counter market on which the Common Stock is then
traded for the ten (10) trading days prior to the date on which the Market Price
is being determined. In the event that Recognized Value or Market Price shall be
determined in connection with a Change in Control (as defined herein) the Market
Price shall be determined as of the date ninety (90) days prior to public
knowledge of such Change in Control.
4.3. MAXIMUM PAYOUT TERM. The Consideration shall be deemed paid in
full and all sums due to Xxxxxxxx under this Agreement shall be deemed satisfied
on the tenth anniversary of this Agreement, even if the Maximum Consideration
described in Section 4.2 has not been paid by this date.
4.4. TERMS OF THE WARRANTS. All of the Warrants issued pursuant to
this Agreement shall be substantially in the form attached hereto as SCHEDULE B.
All Warrants issued under this Agreement will be immediately exercisable and
will expire on the fifth anniversary of their issuance. The exercise price for
the Warrants (the "Strike Price") shall be an amount equal to fifty percent
(50%) of the Market Price on the date such Warrant is issued.
4.5. PROTECTION AGAINST DILUTION. The Strike Price for the shares
of Common Stock and number of shares of Common Stock issuable upon exercise of
the Warrants is subject to adjustment from time to time as provided in the
Warrant attached hereto as Schedule B.
4.6. FUTURE EQUITY FINANCING. In the event SpaceDev seeks
additional equity financing in the public or private market at a price below the
Strike Price with respect to any Warrants then owned by Xxxxxxxx, SpaceDev
agrees to allow Xxxxxxxx a right to participate in that financing up to
Xxxxxxxx'x percentage ownership in the Company on a fully diluted basis.
4.7. STATUTORY WARNING. THE WARRANTS THAT ARE BEING ISSUED BY
SPACEDEV AS THE CONSIDERATION FOR THIS AGREEMENT ARE SECURITIES AS DEFINED BY
THE SECURITIES ACT OF 1933, AS AMENDED. THE WARRANTS AND THE COMMON STOCK THAT
WILL BE ISSUED ON THE EXERCISE OF THE WARRANTS HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OF THE UNITED STATES OR WITH ANY STATE
SECURITIES AGENCY. ON THE EXERCISE OF THE WARRANTS THE HOLDER WILL REPRESENT TO
THE COMPANY THAT THE SHARES ARE BEING ACQUIRED FOR HIS/HER OWN ACCOUNT AND NOT
WITH A VIEW TOWARDS RESALE OR OTHER DISTRIBUTION AND ACKNOWLEDGE THE COMMON
STOCK HAS NOT BEEN REGISTERED. THE SALE OR TRANSFER OF ANY WARRANT OR ANY SHARE
OF COMMON STOCK ISSUED PURSUANT TO A WARRANT MAY BE ILLEGAL WITHOUT REGISTRATION
OR QUALIFICATION UNDER AN EXEMPTION FROM REGISTRATION SPACEDEV HAS NO PLANS TO
REGISTER THE SHARES OF
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COMMON STOCK THAT WILL BE ISSUED PURSUANT TO THE WARRANTS DESCRIBED HEREIN
EXCEPT AS SET FORTH IN SECTION 4.8 BELOW.
4.8. REGISTRATION OF SHARES. SpaceDev agrees to undertake
registration with the U.S. Securities and Exchange Commission for the public
sale of the Warrants or shares of Common Stock issued pursuant to such Warrants
at the request of Xxxxxxxx. All costs and fees involved in any such registration
shall be at the sole expense of Xxxxxxxx.
5. RESERVED.
6. WARRANTIES.
6.1. SpaceDev acknowledges that it has conducted a thorough review
of all aspects of the Technology. Xxxxxxxx makes no representations or
warranties concerning the Technology and licenses and transfers the Technology
to SpaceDev all faults. Xxxxxxxx shall have no duty to indemnify SpaceDev with
respect to the Technology or with respect to any use that SpaceDev may make
thereof.
7. CONFIDENTIAL TREATMENT OF INFORMATION.
7.1. SpaceDev covenants and agrees that any of the trade secrets
or other confidential or proprietary information related in any way to the
Technology which may from time to time be made available or become known to
SpaceDev (the "Confidential Information") shall be treated as confidential,
shall be used solely in connection with performance under the terms of this
Agreement or any other agreement between Xxxxxxxx and SpaceDev and shall not be
disclosed to any persons other than employees of SpaceDev who have a reasonable
need for access thereto in connection with performance of this Agreement by
SpaceDev. SpaceDev shall take all reasonable measures to protect the
confidentiality of the Confidential Information. All memoranda or papers
containing Confidential Information which SpaceDev may receive shall be returned
to Xxxxxxxx upon request. To that end, and without limiting the generality of
the foregoing provision, SpaceDev agrees to cause all written materials and
other documents relating to or containing Confidential Information, including
all sketches, drawings, reports and notes, and all copies, reprints, and
reproductions, to be plainly marked to indicate the secret and confidential
nature thereof and to prevent the unauthorized use or reproduction thereof.
8. TERMINATION.
8.1. TERMINATION BY XXXXXXXX. Xxxxxxxx reserves the right in his
sole discretion to cancel this Agreement and terminate all License Rights
granted hereunder if SpaceDev has not received Revenue (as defined herein) in
the sum of three million five hundred thousand dollars ($3,500,000) on or before
the fifth anniversary of the execution of this Agreement. In the event of such
termination, the parties hereto agree that all right, title and interest in the
Licenses Rights and the Technology shall remain to be the property of Xxxxxxxx.
8.2. CHANGE IN CONTROL. In the event SpaceDev undergoes a Change in
Control (as defined herein), this Agreement may be terminated at the option of
Xxxxxxxx. Subject to
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limitations in Section 4.2, in the event Xxxxxxxx elects to terminate this
Agreement upon such Change in Control, SpaceDev shall, at the option of
Xxxxxxxx, (i) pay to Xxxxxxxx, within 30 days of the Change in Control, the
difference between $6,000,000 and the Recognized Value for all Warrants
previously exercised, computed as of the date of such exercise, or (ii) issue to
Xxxxxxxx a number of Warrants or shares of Common Stock equal to the difference
between 3,000,000 shares and the number of shares of Common Stock issuable upon
exercise of the Warrants then owned by Xxxxxxxx or previously exercised by
Xxxxxxxx. "Change in Control" shall mean any reorganization or consolidation of
SpaceDev with, or any merger of SpaceDev with or into, another entity (other
than a consolidation or merger in which SpaceDev is the surviving corporation)
or any sale or transfer to another entity of the majority of assets of SpaceDev.
9. FURTHER ACTS AFTER CLOSING.
9.1. FURTHER ACTS. Xxxxxxxx, at any time after the execution of
this Agreement, will execute, acknowledge and deliver any further documents,
instruments, conveyances and other assurances, documents and instruments of
transfer reasonably requested by SpaceDev for the purpose of assigning,
transferring, granting, conveying and confirming to SpaceDev or reducing to
possession of any or all information or property to be conveyed and transferred
under this Agreement. If requested by SpaceDev, Xxxxxxxx further agrees to
prosecute or otherwise enforce in his own name for the benefit of SpaceDev any
patents, trademarks, claims, rights or benefits that are licensed or transferred
to SpaceDev under this Agreement and that require, as a matter of law,
prosecution or enforcement in Xxxxxxxx'x name. The expense incurred in any
prosecution or enforcement of patent claims, rights, or benefits under this
paragraph shall be borne by the respective parties to such proceeding.
9.2. MUTUAL COOPERATION. The parties hereto agree to reasonably
cooperate in any reasonable effort by either party to extend the current
intellectual property rights associated with the Technology into foreign
jurisdictions or to defend or to pursue any legal action regarding intellectual
property rights associated with the Technology.
10. COVENANT NOT TO COMPETE.
10.1. As consideration for the issuance of the twenty-five thousand
Warrants at the execution of this Agreement, Xxxxxxxx will not at any time,
during the term of this Agreement without the written consent of SpaceDev,
individually or jointly, or as a member, employee, or agent of any partnership,
or an agent, shareholder or investor of any other corporation, directly or
indirectly, own, manage, operate, join, control or participate in the ownership,
management, operation, or control of, or consult with, or permit the use of
their name by, or be conducted in any manner with, any technology which directly
or indirectly competes with the Technology.
10.2. The provisions of and enforcement of this section 10 will be
excluded from the requirement to arbitrate disputes as set forth in Section 11.1
below. Any breach of this Section 10 may be enforced in a court of law or equity
through any equitable or legal remedy
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available including, but not limited to, monetary damages, injunctive relief or
any other relief the court deems just and proper.
11. MISCELLANEOUS.
11.1. ARBITRATION OF DISPUTES.
11.1.1. Any controversy, dispute or claim arising out of the
interpretation, performance or breach of this Agreement, including disputes as
to the jurisdiction of the Arbitrator, but excluding any breach regarding the
Covenant Not To Compete, shall be resolved at the request of any party hereto by
a binding arbitration conducted by a single arbitrator in the Commonwealth of
Virginia in accordance with the American Arbitration Association Commercial
Arbitration Rules (the "Rules") except as modified by the terms of this Section.
The arbitrator shall apply Virginia substantive law to the matter(s) which are
the subject of the arbitration. The parties hereby agree that the Rules are
modified as follows:
11.1.2. If the parties have not agreed to an Arbitrator
within thirty (30) days after initiation of arbitration, then a Judicial
Arbitration and Mediation Service shall appoint a single neutral Arbitrator as
soon thereafter as practical.
11.1.3. The parties shall be permitted discovery, including
depositions, under the supervision and rules set by the arbitrator; provided,
however, that discovery shall be completed within forty-five (45) days of
selection or appointment of the arbitrator. The arbitrator shall have power to
impose such sanctions as the arbitrator deems appropriate for failure of a party
or counsel for a party to comply with discovery rules established by the
arbitrator.
11.1.4. A hearing before the arbitrator shall be held no
later than ninety (90) days after initiation of arbitration, unless a hearing is
waived by all parties.
11.1.5. No later than ten (10) days from the date of closing
of the arbitration hearing, or, if an oral hearing has been waived, from the
date of transmitting final statements and proofs to the arbitrator, the
arbitrator shall render a written Decision.
11.2. ASSIGNABILITY. Neither this Agreement nor any interest herein
shall be assignable by either party without the prior written consent of the
other party.
11.3. ATTORNEYS' FEES AND COSTS. In any action or arbitration
proceeding between the parties for the interpretation, reformation, enforcement
or rescission of this Agreement, the prevailing party will be entitled to
recover from the other party reasonable attorneys' fees and court and other
litigation costs incurred.
11.4. CAPACITY TO SIGN. All parties covenant that they possess all
necessary capacity and authority to sign and enter this Agreement. All
individuals signing this Agreement for a corporation, a partnership, or other
legal entity, or signing under a power of attorney or as a trustee, guardian,
conservator, or in any other legal capacity, covenant that they have the
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necessary capacity and authority to act for, sign, and bind the respective
entity or principal on whose behalf they are signing.
11.5. CAPTIONS. The article and section headings are for reference
only and in no way define, limit, extend or interpret the scope of this
Agreement or of any particular article or section.
11.6. CONSTRUCTION. The language in all parts of this Agreement
shall be in all cases construed simply according to its fair meaning and not
strictly for or against any party.
11.7. COUNTERPARTS, SIGNATURES BY TELECOPY. This Agreement may be
executed in multiple counterparts, all of which taken together shall constitute
one original agreement. The signature of a party which is delivered to the other
party(ies) by telecopy, telegram or other electronic means shall constitute due
delivery, provided that the original signature is delivered to the proper party
by mail or in person within seventy-two (72) hours.
11.8. EFFECTIVE DATE. The effective date of this Agreement shall be
the date above first written.
11.9. ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement between the parties with regard to the subject matter hereof. All
agreements, covenants, representations and warranties, express and implied, oral
and written, of the parties with regard to the subject matter hereof are
contained herein, and in the schedules and exhibits hereto and the documents
referred to herein are implementing the provisions hereof. All schedules and
exhibits are incorporated by reference to be a part of this Agreement. No other
agreements, covenants, representations or warranties, express or implied, oral
or written, have been made by either party to the other with respect to the
subject matter of this Agreement. All prior and contemporaneous conversations,
negotiations, possible and alleged agreements and representations, covenants,
and warranties with respect to the subject matter hereof are waived, merged
herein and superseded hereby.
11.10. GOVERNING LAW, EXCLUSIVE JURISDICTION. This Agreement is
being delivered in the Commonwealth of Virginia and shall be construed and
enforced in accordance with the laws thereof. Each party consents to the
exclusive jurisdiction and venue in any state or federal court located within
such state for any action brought or maintained hereunder.
11.11. MODIFICATION. No modification, waiver, or discharge of this
Agreement will be valid unless it is in writing and signed by the party against
whom the enforcement of the modification, waiver or discharge is or may be
sought.
11.12. NO THIRD-PARTY BENEFICIARY. Any agreement to pay any amount
shall be only for the benefit of the parties hereto and their respective heirs,
successors, and assigns, and such agreement and assumption shall not inure to
the benefit of the obligees of any indebtedness or any other party whomsoever,
it being the intention of the parties that no one shall be deemed to be a
third-party beneficiary of this Agreement.
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11.13. NO WAIVER. A party's failure to insist on the strict
performance of any covenant or duty required by the Agreement, or pursue any
remedy under the Agreement, shall not constitute a waiver of the breach of the
remedy.
11.14. NOTICES. All notices or other communications required or
permitted hereunder shall be in writing, and shall be personally delivered or
delivered by overnight commercial carrier or sent by registered or certified
mail, postage prepaid, return receipt requested. Such notice shall be deemed
served on the day actually personally served or the third day after the notice
was placed in the mail or overnight delivery service.
11.15. NUMBER AND GENDER. Where the context in which words are used
in this Agreement indicates that such is the intent, the words in the singular
number shall include the plural and vice versa, and the words in the masculine
gender shall include the feminine and neuter genders and vice versa.
11.16. SEVERABILITY. In the event that any provision of this
Agreement shall be held to be invalid, the same shall not affect in any respect
whatsoever the validity of the remainder of this Agreement.
11.17. TIME OF ESSENCE. Time is of the essence of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement and
it shall be effective as of the date set forth above.
SPACEDEV INC.
By: /s. Xxxxx X. Xxxxxx /s/ Xxxx X. Xxxxxxxx
--------------------------- ------------------------------
Name: Xxxxx X. Xxxxxx Xxxx X. Xxxxxxxx
Title: President
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SCHEDULE A - DESCRIPTION OF TECHNOLOGY
The TECHNOLOGY shall mean and include all of the assets purchased by Xxxxxxxx
from AMROC related to hybrid propulsion systems, including but not limited to
the following:
A. All of the AMROC patents, including, but not limited to: (1)
United States Patent 5,339,625 issued August 23, 1994,
entitled "Hybrid rocket motor solid fuel grain"; (2) United
States Patent 5,119,627 issued Jun. 9, 1992, entitled
"Embedded pressurization system for hybrid rocket motor"; and
(3) United States Patent 5,582,001 issued Dec. 10, 1996,
entitled "Hybrid rocket combustion enhancement".
B. Any and all foreign patents and patent applications as filed
by the American Rocket Company.
C. Any and all engineering, drawings, designs, formulas, computer
models, and know-how along with all equipment and other items
of tangible personal property related to or required to
further develop, manufacture, sell, or make use of the
Technology.
D. Any and all patent rights, applications, trade names,
trademarks, copyrights, business contracts, vendor lists, and
other information and intellectual property concerning the
Technology.
E. Any and all data files, documentation, files, telephone
numbers, computer disks, computer tapes, computer programs and
all other data used in connection with the Technology.
F. All stand alone rocket motor modules derived from the
Technology and integrated launch systems whose primary
propulsion is derived from the Technology.
SCHEDULE B - FORM OF WARRANT
THE TRANSFER OF THIS WARRANT IS SUBJECT TO RESTRICTIONS CONTAINED HEREIN.
THIS WARRANT HAS BEEN ISSUED IN RELIANCE UPON THE REPRESENTATION OF THE HOLDER
THAT IT HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARDS
THE RESALE OR OTHER DISTRIBUTION THEREOF. NEITHER THIS WARRANT NOR THE SHARES
ISSUABLE UPON THE EXERCISE OF THIS WARRANT, HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THE SALE OR TRANSFER OF
THIS WARRANT OR ANY STOCK ISSUED PURSUANT TO THIS WARRANT MAY BE ILLEGAL UNLESS
FIRST REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") OR
SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER ONE OF THE COMMISSION'S RULES.
SPACEDEV, INC.
A Colorado Corporation
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES that, pursuant to the agreement (the "Agreement") dated August
_____, 1998 by and between Xxxx X. Xxxxxxxx (the "Holder") and SPACEDEV, INC.,
a Colorado corporation (hereinafter called the "Corporation"), the Holder shall
receive Warrants entitling the Holder to purchase from the Corporation shares of
common stock par value $.0001 per share, (the "Common Stock") as set forth
below:
1. WARRANT TO PURCHASE:
Number of Shares: ___________________
Date First Available to be Exercised:_____________________
This Warrant Expires and no shares hereunder may be purchased after (the
"Expiration Date") __________________.
2. EXERCISE PRICE. Holder shall be entitled to exercise the Warrants
at the a price equal to $ _____________ per share of Common Stock.
3. EXERCISE OF WARRANT.
3.1. The rights represented by this Warrant may be exercised by
the Holder, at any time or from time to time prior to the Expiration Date, in
whole or in part, but not as to a fractional share of Common Stock, by the
surrender of this Warrant (properly endorsed) at the office of the Corporation
as it may designate by notice in writing to the Holder hereof at the address of
the Holder appearing on the books of the Corporation, and by payment to the
Corporation of the Warrant Price in cash or by certified or official bank check,
for each share being purchased.
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3.2. In the event of any exercise of the rights represented by
this Warrant, a certificate or certificates for the shares of Common Stock so
purchased, registered in the name of the Holder, or its nominee or other party
designated in the purchase form by the Holder hereof, shall be delivered to the
Holder within sixty (60) business days after the date in which the rights
represented by this Warrant shall have been so exercised; and, unless this
Warrant has expired or has been exercised in full, a new Warrant representing
the number of shares (except a remaining fractional share), if any, with respect
to which this Warrant shall not then have been exercised shall also be issued to
the Holder within such time.
3.3. The person in whose name any certificate for shares of
Common Stock is issued upon exercise of this Warrant shall for all purposes be
deemed to have become the Holder of record of such shares on the date on which
this Warrant was surrendered and payment of the Warrant Price, except that, if
the date of such surrender and payment is a date on which the stock transfer
books of the Corporation are closed, such person shall be deemed to have become
the Holder of such shares at the close of business on the next succeeding date
on which the stock transfer books are open. No fractional shares shall be issued
upon exercise of this Warrant and no payment or adjustment shall be made upon
any exercise on account of any cash dividends on the Common Stock issued upon
such exercise. If any fractional interest in a share of Common Stock would, be
delivered upon such exercise, the Corporation, in lieu of delivery of a
fractional share thereof shall pay to the Holder an amount in cash equal to the
current market price of such fractional share as determined in good faith by the
Board of Directors of the Corporation (the "Board").
4. PROTECTION AGAINST DILUTION. The Exercise Price for the Common
Stock and number of shares of Common Stock issuable upon exercise of the
Warrants is subject to adjustment from time to time as follows:
4.1. DIVIDENDS, SUBDIVISIONS, RECLASSIFICATIONS, ETC. In case at
any time or from time to time after the date of this Warrant, the Corporation
shall (i) take a record of the holders of the Common Stock for the purpose of
entitling them to receive a dividend or a distribution on the Common Stock
payable in Common Stock or other class of securities, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding Common Stock into a
smaller number of shares, then, and in each such case, the Exercise Price in
effect at the time of the record date for such dividend or distribution or the
Effective date of such subdivision, combination or reclassification shall be
adjusted in such a manner that the Exercise Price for the shares issuable upon
exercise of the Warrants immediately after such event shall bear the same ratio
to the Exercise Price in effect immediately prior to any such event as the total
number of shares of Common Stock outstanding immediately prior to such event
shall bear to the total number of shares of Common Stock outstanding immediately
after such event.
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4.2. ADJUSTMENT OF NUMBER OF SHARES PURCHASABLE. When any
adjustment is required to be made in the Exercise Price under this Section 4,
(i) the number of shares of Common Stock issuable upon exercise of the Warrants
shall be changed (upward to the nearest full share) to the number of shares
determined by dividing (x) an amount equal to the number of shares issuable
pursuant to the exercise of the Warrants immediately prior to the adjustment
multiplied by the Exercise Price in effect immediately prior to the adjustment,
by (y) the Exercise Price in effect immediately after such adjustment, and (ii)
upon exercise of the Warrant, the holder will be entitled to receive the number
of shares or other securities referred to in Section 4.1 that such holder would
have received had the Warrant been exercised prior to the events referred to in
Section 4.1.
4.3. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.
In case of any reorganization or consolidation of the Corporation with, or any
merger of the Corporation with or into, another entity (other than a
consolidation or merger in which the Corporation is the surviving corporation)
or in case of any sale or transfer to another entity of the majority of assets
of the Corporation, the entity resulting from such reorganization or
consolidation or surviving such merger or to which such sale or transfer shall
be made, as the case may be, shall make suitable provision (which shall be fair
and equitable to the holders of Warrants) and shall assume the obligations of
the Corporation hereunder (by written instrument executed and mailed to each
holder of the Warrants then outstanding) pursuant to which, upon exercise of the
Warrants, at any time after the consummation of such reorganization,
consolidation merger or conveyance, the holder shall be entitled to receive the
shares or other securities or property that such holder would have been entitled
to upon consummation if such holder had exercise the Warrants immediately prior
thereto, all subject to further adjustment as provided in this Section 4.
4.4. CERTIFICATE AS TO ADJUSTMENTS. In the event of adjustment as
herein provided in paragraphs of this Section 4, the Corporation shall promptly
mail to each Warrant holder a certificate setting forth the Exercise Price and
number of shares of Common Stock issuable upon exercise after such adjustment
and setting forth the kind and amount of share so other securities or property
into which the Warrants shall be exercisable after any adjustment of the
Exercise Price as provided herein.
4.5. MINIMUM ADJUSTMENT. Notwithstanding the foregoing, no
certificate as to adjustment of the Exercise Price hereunder shall be made if
such adjustment results in a change in the Exercise Price then in effect of less
than two cents ($0.02) and any adjustment of less than two cents ($0.02) of any
Exercise Price shall be carried forward and shall be made at the time of and
together with any subsequent adjustment that, together with the adjustment or
adjustments so carried forward, amounts to two cents ($0.02) or more; provided
however, that upon the exercise of a Warrant, the Corporation shall have made
all necessary adjustments (to the nearest cent) not theretofore made to the
Exercise Price up to and including the date upon which such Warrant is
exercised.
4.6. NO IMPAIRMENT. The Corporation shall not, by amendment of
its organizational documents or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
action, avoid or seek to avoid the
3
observance or performance of any of the terms of the Warrants, but will at all
times in good faith take any and all action as may be necessary in order to
protect the rights of the holders of the Warrants against impairment. The
Corporation will at all times reserve and keep available out of its authorized
Common Stock, solely for the purpose of issue upon the exercise of this Warrant
as herein provided, such number of shares of Common Stock as shall then be
issuable upon the exercise of this Warrant and other Warrants owned by the
Holder. The Corporation shall from time to time in accordance with applicable
law increase the authorized amount of its Common Stock if at any time the number
of shares of Common Stock remaining unissued and available for issuance shall
not be sufficient to permit exercise of this Warrant and other Warrants owned by
the Holder. The Corporation covenants that all shares of Common Stock which
shall be so issued shall be duly and validly issued and fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof, and, without limiting the generality of the foregoing, the
Corporation will take all such action as may be necessary to assure that all
such shares of Common Stock may be so issued without violation of any applicable
law or regulation, or of any requirements of any national securities exchange
upon which the Common Stock of the Corporation may be listed.
4.7. The issuance of certificates for shares of Common Stock upon
exercise of this Warrant shall be made without deduction to the Holders of this
Warrant for any issuance tax in respect thereof provided that the Corporation
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name
other than that of Holder of this Warrant.
4.8. The Corporation will at no time close its transfer books
against the transfer of the shares of Common Stock issued or issuable upon the
exercise of this Warrant in any manner which interferes with the timely exercise
of this Warrant
5. NOTICE OF RECORD DATES.
5.1. In the event of:
(a) Any taking by the Corporation of a record of the Holders
of any class of securities for the purpose of determining the Holders thereof
who are entitled to receive any dividend or other distribution (other than cash
dividends out of earned surplus), or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right;
(b) Any capital reorganization of the Corporation, any
reclassification, or recapitalization of the capital stock of the Corporation,
or any transfer of all or substantially all the assets of the Corporation to, or
consolidation or merger of the Corporation with or into any other corporation;
or
(c) Any voluntary or involuntary dissolution, liquidation or
winding-up of the Corporation;
4
then and in each such event the Corporation will give notice to the Holder of
this Warrant specifying (i) the date on which any such record is to be taken for
the purpose of such dividend, distribution or right and stating the amount and
character of such dividend, distribution or right, and (ii) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the Holders of record of Common
Stock will be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least 10 days and not more than 90
days prior to the date therein specified, and such notice shall state that the
action in question or the record date is subject to the effectiveness of a
registration statement under the Securities Act of 1933 or to a favorable vote
of shareholders, if either is required.
6. REGISTRATION RIGHTS.
6.1. REGISTRATION OF THE COMMON STOCK. At the request of the
holder, the Corporation agrees to file with the Securities and Exchange
Commission (the "Commission") at the Holder's expense a shelf registration
statement under Rule 415 of the Securities Act or other appropriate registration
statement if a shelf registration is not available under the Securities Act (a
"Registration Statement"), covering the resale of the Warrants and all of the
shares of the Common Stock that may be issued upon exercise of the Warrants
("Warrant Shares") in the event that holders of at least 50,000 Warrants (or
Warrant Shares) request such registration. The holders of Warrants and/or
Warrant Shares may also request "piggyback" registration of their Warrants and
Warrant Shares. Upon any of such requests, the Corporation will:
(a) provide written notice (the "Notice") of such request
within 10 days of the receipt of such request to each holder of Warrants and/or
Warrant Shares not a party to the request;
(b) use its best efforts to have such Registration Statement
declared effective and to keep it effective for a period of 180 days (the
"Effective Period");
(c) give each holder of Warrants and/or Warrant Shares,
their underwriters, if any, and their counsel and accountants a reasonable
opportunity to participate in the preparation of the Registration Statement and
give such persons reasonable access to its books, records, officers and
independent public accountants;
(d) furnish to each holder of Warrants and/or Warrant Shares
such numbers of copies of prospectuses, and supplements or amendments thereto,
and such other documents as such holder reasonably requests;
(e) register or qualify the securities covered by the
Registration Statement under the securities or blue sky laws of such
jurisdictions within the United States as any holder of Warrants and/or Warrant
Shares shall reasonably request, and do such other reasonable acts and things as
may be required of it to enable such holders to consummate the sale or other
disposition in such jurisdictions of the Warrants and/or Warrant Shares;
5
(f) furnish, at the request of the holders of Warrants
and/or Warrant Shares, on the date Warrant Shares are delivered to the
Underwriters for sale pursuant to such registration, or, if such Warrants and/or
Warrant Shares are not being sold through underwriters, on the date the
Registration Statement with respect to such Warrants and/or Warrant Shares
becomes effective, (A) a securities opinion of counsel representing the
Corporation for the purposes of such registration covering such legal matters as
are customarily included in such opinions and (B) letters of the firm of
independent public accountants that certified the financial statements included
in the Registration Statement, addressed to the underwriters, covering
substantially the same matters as are customarily covered in accountants'
letters delivered to underwriters in underwritten public offerings of securities
and such other financial matters as such holders (or the underwriters, if any)
may reasonably request;
(g) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission;
(h) enter into and perform an underwriting agreement with
respect to the sale of the holders' Warrant Shares with the managing
underwriter, if any, selected by the Holder, containing customary (A) terms of
offer and sale of the securities, payment provisions, underwriting discounts and
commissions and (B) representations, warranties, covenants, indemnities, terms
and conditions; and
(i) keep the holders of the Warrants and/or Warrant Shares
advised as to the initiation and progress of the registration.
The Corporation further agrees to supplement or make amendments to
each Registration Statement, if required by the rules, regulations or
instructions applicable to the registration form utilized by the Corporation or
by the Securities Act or rules and regulations thereunder for such Registration
Statement. Notwithstanding the foregoing, if for any reason the effectiveness of
a Registration Statement is delayed or suspended or it ceases to be available
for sales of Warrants and/or Warrant Shares thereunder, the Effective Period
shall be extended by the aggregate number of days of such delay, suspension or
unavailability.
6.2. LISTING ON SECURITIES EXCHANGE. If the Corporation shall
list or maintain the listing of any shares of Common Stock on any securities
exchange or national market system, it will at its expense and as necessary to
permit the registration and sale of the Warrants and/or Warrant Shares
hereunder, list thereon, maintain and, when necessary, increase such listing to
include such Warrants and/or Warrant Shares.
6.3. REGISTRATION NOT REQUIRED. Notwithstanding the foregoing,
the Corporation shall not be required to file or maintain the effectiveness of a
registration statement relating to Warrants and/or Warrant Shares after the
first date upon which, in the opinion of counsel to the Holder, all of the
Warrants and/or Warrant Shares covered thereby could be sold by the holders
thereof in any period of three months pursuant to Rule 144 under the Securities
Act, or any successor rule thereto.
6.4. INDEMNIFICATION.
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(a) In connection with the Registration Statement, the
Corporation agrees to indemnify holders of Warrants and/or Warrant Shares within
the meaning of Section 15 of the Securities Act, against all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation)
caused by any untrue, or alleged untrue, statement of a material fact contained
in the Registration Statement, preliminary prospectus or prospectus (as amended
or supplemented if the Corporation shall have furnished any amendments or
supplements thereto) or caused by any omission or alleged omission, to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses are caused by any untrue statement, alleged
untrue statement, omission, or alleged omission based upon information furnished
to the Corporation by the holders of Warrants and/or Warrant Shares expressly
for use therein. The Corporation and each officer, director and controlling
person of the Corporation shall be indemnified by each holder of Warrants and/or
Warrant Shares covered by the Registration Statement for all such losses,
claims, damages, liabilities and expenses (including reasonable costs of
investigation) caused by any such untrue, or alleged untrue, statement or any
such omission, or alleged omission, based upon information furnished to the
Corporation by the holders of Warrants and/or Warrant Shares expressly for use
therein in a writing signed by the holder.
(b) Promptly upon receipt by a party indemnified under this
Section 6.4 of notice of the commencement of any action against such indemnified
party in respect of which indemnity or reimbursement may be sought against any
indemnifying party under this Section 6.4, such indemnified party shall notify
the Corporation in writing of the commencement of such action, but the failure
to so notify the Corporation shall not relieve it of any liability that it may
have to any indemnified party otherwise than under this Section 6.4 unless such
failure shall materially adversely affect the defense of such action. In case
notice of commencement of any such action shall be given to the Corporation as
above provided, the Corporation shall be entitled to participate in and, to the
extent it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense of such action at its own expense, with counsel
chosen by it and reasonably satisfactory to such indemnified party. The
indemnified party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel (other than reasonable costs of investigation) shall be paid by the
indemnified party unless (i) the Corporation agrees to pay the same, (ii) the
Corporation fails to assume the defense of such action with counsel reasonably
satisfactory to the indemnified party or (iii) the named parties to any such
action (including any impleaded parties) have been advised by such counsel that
representation of such indemnified party and the Corporation by the same counsel
would be inappropriate under applicable standards of professional conduct (in
which case the Corporation shall not have the right to assume the defense of
such action on behalf of such indemnified party). No indemnifying party shall be
liable for any settlement entered into without its consent.
6.5. CONTRIBUTION.
(a) If for any reason the indemnification provisions
contemplated by Section 6.5 are either unavailable or insufficient to hold
harmless an indemnified party in respect
7
of any losses, claims, damages or liabilities referred to therein, then the
party that would otherwise be required to provide indemnification or the
indemnifying party (in either case, for purposes of this Section 6.5, the
"Indemnifying Party") in respect of such losses, claims, damages or liabilities,
shall contribute to the amount paid or payable by the party that would otherwise
be entitled to indemnification or the indemnified party (in either case, for
purposes of this Section 6.5, the "Indemnified Party") as a result of such
losses, claims, damages, liabilities or expense, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and the
Indemnified Party, as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact related to information supplied by the Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party. In no
event shall any holder of Warrants and/or Warrant Shares covered by the
Registration Statement be required to contribute an amount greater than the
dollar amount of the proceeds received by such holder from the sale of Warrants
and/or Warrant Shares pursuant to the registration giving rise to the liability.
(b) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6.5 were determined by pro
rata allocation (even if the holders or any underwriters or all of them were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. No person or entity determined to have
committed a fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person or entity
who was not guilty of such fraudulent misrepresentation.
(c) The contribution provided for in this Section 6.5 shall
survive the termination or exercise of this Warrant and shall remain in full
force and effect regardless of any investigation made by or on behalf of any
Indemnified Party.
7. NO SHAREHOLDER RIGHTS OR LIABILITIES. This Warrant shall not
entitle the Holder hereof to any voting rights or other rights as a shareholder
of the Corporation. No provision hereof, in the absence of affirmative action by
the Holder hereof to purchase shares of Common Stock, and no mere enumeration
hereon of the rights or privileges of the Holder hereof shall give rise to any
liability of such Holder for the Warrant Price or as a shareholder of the
Corporation, whether such liability is asserted by the Corporation or by
creditors of the Corporation.
8. REPRESENTATIONS OF HOLDER. The Holder hereby represents and
acknowledges to the Corporation that:
8
8.1. This Warrant, the Common Stock issuable upon exercise of
this Warrant, and any securities issued with respect to either of them by way of
a stock dividend or stock split or in connection with a recapitalization,
merger, consolidation or other reorganization will be "restricted securities" as
such term is used in the rules and regulations under the Securities Act and that
such securities have not been and will not be registered under the Securities
Act or any state securities law, and that such securities must be held
indefinitely unless registration is effected or transfer can be made pursuant to
appropriate exemptions;
8.2. He has read, and fully understands, the terms of this
Warrant set forth on its face and the attachment hereto, including the
restrictions on transfer contained herein;
8.3. He has either a pre-existing personal or business
relationship with the Corporation or one of its officers, directors or
controlling persons;
8.4. He is receiving this Warrant for investment and for its own
account and not with a view to or for sale in connection with any distribution
of this Warrant or the Common Stock of the Corporation issuable upon exercise of
this Warrant, and it has no intention of selling such securities in a public
distribution in violation of the federal securities laws or any applicable state
securities laws; provided that nothing contained herein will prevent Holder from
transferring such securities in compliance with the terms of this Warrant and
the applicable federal and state securities laws;
8.5. He is an "accredited investor" within the meaning of
paragraph (a) of Rule 501 of Regulation D promulgated by the Securities and
Exchange Commission.
8.6. He has been afforded access to the Corporation's financial
and business information through disclosure meetings or otherwise, and has had
an opportunity to ask the Corporation's officers questions regarding the
Corporation and its financial and business condition and to get independent
advice from a professional or investment advisor concerning the investment; and
it will not exercise the Warrant unless the same is true with respect to its
decision to exercise;
8.7. He has the knowledge and experience in financial and
business matters to be capable of evaluating the merits and risks of this
investment and to protect its own interest;
8.8. He acknowledges that an investment in the Corporation and
this Warrant involves a high degree of risk; and
8.9. This Warrant, or any substitution warrant, issued to Holder
(or his assigns) is subject to the following legend condition:
"THE TRANSFER OF THIS WARRANT IS SUBJECT TO RESTRICTIONS CONTAINED
HEREIN. THIS WARRANT HAS BEEN ISSUED IN RELIANCE UPON THE
REPRESENTATION OF THE HOLDER THAT IT HAS BEEN ACQUIRED FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TOWARDS THE RESALE OR OTHER DISTRIBUTION
THEREOF. NEITHER THIS WARRANT
9
NOR THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933."
8.10. The Corporation may affix the following legend (in addition
to any other legend(s), if any, required by applicable state corporate and/or
securities laws) to certificates for shares of Common Stock (or other
securities) issued upon exercise of this Warrant ("Warrant Shares"):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED OR ANY STATE
SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR AN OPINION OF THE
COMPANY'S COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT"
9. NOTICE OF PROPOSED TRANSFERS. The Holder of this Warrant, by
acceptance hereof, agrees to comply in all respects with the provisions of this
agreement. Prior to any proposed transfer of this Warrant or any Warrant Shares,
unless there is in effect a registration statement under the Securities Act of
1933, as amended (the "Securities Act") covering the proposed transfer, the
Holder of such securities shall give written notice to the Corporation of such
Holder's intention to effect such transfer. Each such notice shall describe the
manner and circumstances of the proposed transfer in sufficient detail, and
shall be accompanied (except in transactions in compliance with Rule 144) by
either (1) a written opinion of legal counsel who shall be reasonably
satisfactory to the Corporation addressed to the Corporation and reasonably
satisfactory in form and substance to the Corporation's counsel, to the effect
that the proposal transfer of the Warrant and/or Warrant Shares may be effected
without registration under the Securities Act, or (ii) a "no action" letter from
the U.S. Securities and Exchange Commission (the "Commission") to the effect
that the transfer of such securities without registration will not result in a
recommendation by the staff of the Commission that enforcement action be taken
with respect thereto, whereupon the Holder of such securities shall be entitled
to transfer such securities in accordance with the terms of the notice delivered
by the Holder to the Corporation. Each new certificate evidencing the Warrant
and/or Warrant Shares so transferred shall bear the appropriate restrictive
legends set forth herein, except that such certificate shall not bear such
restrictive legend if, in the opinion of counsel for the Corporation, such
legend is not required in order to establish or assist in compliance with any
provisions of the Securities Act or any applicable state securities laws.
10. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is
lost, stolen, mutilated or destroyed, the Corporation may, on such terms as to
indemnity or otherwise as it may in its discretion reasonably impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute an original
contractual obligation of the Corporation, whether or not the allegedly lost,
stolen, mutilated or destroyed. The Warrant shall be at any time enforceable by
anyone.
10
11. PRESENTMENT. Prior to due presentment for registration of transfer
of this Warrant, the Corporation may deem and treat the Holder as the absolute
owner of the Warrant, notwithstanding any notation of ownership or other writing
thereon, for the purpose of any exercise thereof and for all other purposes, and
the Corporation shall not be affected by any notice to the contrary.
12. NOTICE. Notice or demand pursuant to this Warrant shall be
sufficiently given or made, if sent by first-class mail, postage prepaid,
addressed, if to the Holder of this Warrant, to the Holder at has last known
address as it shall appear in the records of the Corporation, and if to the
Corporation to the Secretary of the Corporation at the registered offices of the
corporation. The Corporation may alter the address to which communications are
to be sent by giving notice of such change of address in conformity with the
provisions of this Section 9 for the giving of notice.
13. GOVERNING LAW. The validity, interpretation and performance of
this Warrant shall be governed by the laws of the Commonwealth of Virginia
without regard to principles of conflicts of laws.
14. SUCCESSORS, ASSIGNS. Subject to the restrictions on transfer by
Holder set forth herein, all the terms and provisions of the Warrant shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto.
15. SEVERABILITY. Should any part but not the whole of this Warrant
for any reason be declared invalid, such decision shall not affect the validity
of any remaining portion, which remaining portion shall remain in force and
effect as if this Warrant had been executed with the invalid portion thereof
eliminated, and it is hereby declared the intention of the parties hereto that
they would have executed the remaining portion of this Warrant without including
therein any such part which may, for any reason, be hereafter declared invalid,
16. GENDER AND NUMBER. In this Warrant, the masculine, feminine and
neuter genders and the singular and plural shall be deemed to include one
another as appropriate.
17. CAPTIONS. The descriptive headings of the various Sections or
parts of this Warrant are for convenience only and shall not affect the meaning
or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be duly
executed and delivered on and as of the day and year first above written.
SPACEDEV, INC.
a Colorado corporation
By: /s/ Xxxxx Xxxxxx
-------------------------------
Xxxxx Xxxxxx, President
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The undersigned Holder agrees and accepts this Warrant and
acknowledges that he has read and confirms each of the representations contained
herein.
/s/ Xxxx X. Xxxxxxxx
----------------------------
Holder
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