Exhibit 2.4
NEITHER THIS WARRANT NOR THE WARRANT SHARES (AS HEREINAFTER DEFINED) HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE. THIS WARRANT AND THE WARRANT SHARES MAY BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE ACT AND SUCH LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY
WARRANT ISSUED IN EXCHANGE FOR THIS WARRANT.
Warrant No. ____
WARRANT
For the Purchase of Common Stock of
DGSE COMPANIES, INC.
a Nevada corporation
VOID AFTER 5:00 P.M., EASTERN STANDARD TIME, ON ________, 2014.
_________ Shares _________, 2007
FOR VALUE RECEIVED, DGSE COMPANIES, INC., a Nevada corporation (together
with its successors, the "Company"), hereby certifies that STANFORD
INTERNATIONAL BANK LTD. (the "Holder") is entitled, subject to the provisions of
this Warrant, to purchase from the Company up to ___________ shares of common
stock (the "Common Shares"), par value $0.01 per share ("Common Stock"), of the
Company, at an initial exercise price equal to $______ per Common Share (the
"Exercise Price"), during the period commencing ________, 2007 (the "Date of
Issuance") and expiring at 5:00 P.M., Eastern Standard time, on ________, 2014
(the "Expiration Date").
The number of Common Shares to be received upon the exercise of this
Warrant may be adjusted from time to time as hereinafter set forth. The Common
Shares deliverable upon such exercise, or the entitlement thereto upon such
exercise, and as so adjusted from time to time, are hereinafter sometimes
referred to as "Warrant Shares". The warrants issued on the same date hereof
bearing the same terms and conditions as this Warrant shall be collectively
referred to as the "Warrants".
The Holder agrees with the Company that this Warrant is issued, and all the
rights hereunder shall be held subject to, all of the conditions, limitations
and provisions set forth herein.
1. EXERCISE OF WARRANT
(a) By Payment of Cash. This Warrant may be exercised by its
presentation and surrender to the Company at its principal office (or such
office or agency of the Company as it may designate in writing to the Holder
hereof), commencing on the Date of Issuance and expiring at 5:00 P.M., Eastern
Standard time, on the Expiration Date, with the Warrant Exercise Form attached
hereto duly completed and executed and accompanied by payment (either in cash or
by certified or official bank check or by wire transfer, payable to the order of
the Company) of the Exercise Price for the number of shares specified in such
form.
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The Company agrees that the Holder hereof shall be deemed the record owner
of such Common Shares as of the close of business on the date on which this
Warrant shall have been presented and payment made for such Common Shares as
aforesaid whether or not the Company or its transfer agent is open for business.
Certificates for the Common Shares so purchased shall be delivered to the Holder
hereof within a reasonable time, not exceeding 15 days, after the rights
represented by this Warrant shall have been so exercised. If this Warrant should
be exercised in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant of like tenor evidencing the
rights of the Holder hereof to purchase the balance of the shares purchasable
hereunder as soon as reasonably practicable.
Notwithstanding anything to the contrary set forth above, each exercise of
this Warrant shall cover at least the lesser of (i) 10,000 Common Shares (as
adjusted for stock splits, stock dividends, combinations and the like), and (ii)
the total number of Common Shares then subject to the Warrant.
(b) Cashless Exercise. In lieu of the payment method set forth in
Section 1(a) above, if the Common Stock is then traded or listed on a Principal
Market (as defined below), the Holder may elect to exchange all or some of this
Warrant for the Common Shares equal to the value of the amount of this Warrant
being exchanged on the date of exchange. If the Holder elects to exchange this
Warrant as provided in this Section 1(b), the Holder shall tender to the Company
this Warrant for the amount being exchanged, along with the Warrant Exercise
Form attached hereto duly completed and executed indicating the Holder's
election to exchange some or all of this Warrant, and the Company shall issue to
the Holder the number of Common Shares computed using the following formula:
X = Y x (A - B)
----------------
A
Where: X = The number of Common Shares to be issued to the Holder.
Y = The number of Common Shares for which this Warrant is
being exercised (as adjusted to
the date of such calculation).
A = The Market Price (as defined below) of one Common
Share.
B = The Exercise Price (as adjusted to the date of
such calculation).
The Warrant exchange shall take place on the date specified in the form of
notice or if the date the notice is received by the Company is later than the
date specified in the notice, on the date the notice is received by the Company.
As used herein, the term "Market Price" at any date shall be the arithmetic
mean of the last reported sale price or closing price for the most recent five
consecutive Trading Days ending on such date (or, if such date is not a Trading
Day, the next preceding Trading Day) on which trading occurred on such Principal
Market in the Common Stock; the term "Trading Day" means any day other than a
Saturday or a Sunday on which the Company's Principal Market is open for trading
in equity securities; and the term "Principal Market" means the Nasdaq Capital
Market, the New York Stock Exchange, the Nasdaq Global Market, the American
Stock Exchange, the OTC Bulletin Board or any other national securities exchange
registered under Section 6 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), whichever is at the time the principal trading exchange,
market or inter-dealer or automated quotation system for the Common Stock.
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(c) "Easy Sale" Exercise. In lieu of the payment method set forth in
Section 1(a) above, when permitted by law and applicable regulations (including
rules of the Nasdaq and National Association of Securities Dealers ("NASD")),
the Holder may pay the aggregate Exercise Price (the "Exercise Amount") through
a "same day sale" commitment from the Holder (and if applicable a broker-dealer
that is a member of the NASD (an "NASD Dealer")), whereby the Holder irrevocably
elects to exercise this Warrant and to sell a portion of the shares so purchased
to pay the Exercise Amount and the Holder (or, if applicable, the NASD Dealer)
commits upon sale (or, in the case of the NASD Dealer, upon receipt) of such
shares to forward the Exercise Amount directly to the Company.
2. COVENANTS BY THE COMPANY
The Company covenants and agrees as follows:
(a) Reservation of Shares. During the period within which the rights
represented by this Warrant may be exercised, the Company shall, at all times,
reserve and keep available out of its authorized capital stock, solely for the
purposes of issuance upon exercise of this Warrant, such number of its Common
Shares as shall be issuable upon the exercise of this Warrant. If at any time
the number of authorized Common Shares shall not be sufficient to effect the
exercise of this Warrant, the Company will take such corporate action as may be
necessary to increase its authorized but unissued Common Shares to such number
of shares as shall be sufficient for such purpose. The Company shall have
analogous obligations with respect to any other securities or property issuable
upon exercise of this Warrant.
(b) Valid Issuance, etc. All Common Shares which may be issued upon
exercise of the rights represented by this Warrant included herein will be, upon
payment in full thereof, validly issued, fully paid, non-assessable and free
from all liens of the Company.
(c) Taxes. All original issue taxes payable in respect of the issuance
of Common Shares upon the exercise of the rights represented by this Warrant
shall be borne by the Company, but in no event shall the Company be responsible
or liable for income taxes or transfer taxes upon the issuance or transfer of
this Warrant or the Warrant Shares. The Company shall not be required to pay any
tax or other charge imposed in connection with any transfer involved in the
issuance of any certificate for Common Shares in any name other than that of the
Holder of this Warrant, and in such case the Company shall not be required to
issue or deliver any stock certificate or security until such tax or other
charge has been paid, or it has been established to the Company's reasonable
satisfaction that no tax or other charge is due.
(d) Fractional Shares. The Company shall not be required to issue
certificates representing fractions of Common Shares. In lieu of any fractional
interests, the Company shall make a cash payment equal to the Exercise Price
multiplied by such fraction.
3. EXCHANGE OR ASSIGNMENT OF WARRANT
This Warrant is exchangeable, without expense, at the option of the Holder,
upon presentation and surrender hereof to the Company for other warrants of like
tenor but different denominations, entitling the Holder to purchase in the
aggregate the same number of Common Shares then purchasable hereunder. Subject
to the provisions of this Warrant and the receipt by the Company of any required
representations and agreements, upon surrender of this Warrant to the Company
with the Warrant Assignment Form annexed hereto duly completed and executed and
funds sufficient to pay any transfer tax or charge, the Company shall, without
additional charge, execute and deliver a new warrant in the name of the assignee
named in such instrument of assignment and this Warrant shall promptly be
canceled. In the event of a partial assignment of this Warrant, the new warrants
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issued to the assignee and the Holder shall in the aggregate be exercisable for
the same number of Common Shares as the number of Common Shares purchasable
under this Warrant at the time of the partial assignment.
4. RIGHTS OF THE HOLDER
The Holder shall not, by virtue hereof, be entitled to any voting or other
rights of a stockholder of the Company, either at law or in equity, and the
rights of the Holder are limited to those expressed in this Warrant.
5. ADJUSTMENT OF EXERCISE PRICE
(a) Common Stock Dividends; Common Stock Splits; Reclassification. If
the Company, at any time while this Warrant is outstanding, shall (a) pay a
stock dividend on its Common Stock, (b) split or subdivide outstanding shares of
Common Stock into a larger number of shares (or reverse split or combine the
outstanding shares of Common Stock into a smaller number of shares) or (c) issue
by reclassification of shares of Common Stock any shares of capital stock of the
Company, then (i) the Exercise Price shall be multiplied by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding after such event and (ii) the number of shares of
the Warrant Shares shall be multiplied by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding immediately after such
event and the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to such event. Any adjustment made pursuant to
this Section 5(a) shall become effective immediately after the record date for
the determination of stockholders entitled to receive such dividend or
distribution or, in the case of a subdivision or re-classification, shall become
effective immediately after the effective date thereof.
(b) Rights; Options; Warrants or Other Securities. If the Company, at
any time while this Warrant is outstanding, shall fix a record date for the
issuance of rights, options, warrants or other securities to all the holders of
its Common Stock entitling them to subscribe for or purchase, convert to,
exchange for or otherwise acquire shares of Common Stock for no consideration or
at a price per share less than the Exercise Price, the Exercise Price shall be
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding immediately prior to such issuance or sale plus the
number of shares of Common Stock which the aggregate consideration received by
the Company (including the exercise price paid for Convertible Securities) would
purchase at the Exercise Price, and the denominator of which shall be the number
of shares of Common Stock outstanding immediately prior to such issuance date
plus the number of additional shares of Common Stock offered for subscription,
purchase, conversion, exchange or acquisition, as the case may be. Such
adjustment shall be made whenever such rights, options, warrants or other
securities are issued, and shall become effective immediately after the record
date for the determination of stockholders entitled to receive such rights,
options, warrants or other securities.
(c) Subscription Rights. If the Company, at any time while this Warrant
is outstanding, shall fix a record date for the distribution to holders of its
Common Stock, evidence of its indebtedness or assets or rights, options,
warrants or other security (excluding those referred to in Sections 5(a) or 5(b)
above and excluding Excluded Securities) entitling them to subscribe for or
purchase, convert to, exchange for or otherwise acquire any security, then in
each such case the Exercise Price at which this Warrant shall thereafter be
exercisable shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the per-share Market Price on such record date less the then fair
market value at such record date of the portion of such assets or evidence of
indebtedness so distributed applicable to one outstanding share of Common Stock
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as determined by the Board of Directors in good faith, and the denominator of
which shall be the per-share Market Price as of such record date.
(d) Rounding. All calculations under this Section 5 shall be made to
the nearest 1/10th of a cent or the nearest l/100th of a share, as the case may
be.
(e) Notice of Adjustment. Whenever the Exercise Price is adjusted
pursuant to this Section 5, the Company shall promptly deliver to the Holder a
notice setting forth the Exercise Price after such adjustment and setting forth
a brief statement of the facts requiring such adjustment. Such notice shall be
signed by the chairman, chief executive officer, chief operating officer or
chief financial officer of the Company.
(f) Treasury Shares. For purposes of this Section 5, the number of
shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any
shares so owned or held shall be considered an issue or sale of Common Stock by
the Company.
(g) Change of Control; Compulsory Share Exchange. In case of (A) any
Change of Control Transaction (as defined below) or (B) any compulsory share
exchange pursuant to which the Common Stock is converted into other securities,
cash or property (each, an "Event"), lawful provision shall be made (which may
be conditioned upon the surrender and exchange of this Warrant for a warrant of
like tenor, subject to such adjustments as may be reasonably necessary to
account for the applicable transaction, including proportionate adjustments to
the Exercise Price) so that the Holder shall have the right thereafter to
exercise this Warrant for shares of stock and other securities, cash and
property receivable upon or deemed to be held by holders of Common Stock
following such Event, and the Holder shall be entitled upon such Event to
receive upon exercise hereof such amount of shares of stock and other
securities, cash or property as the shares of the Common Stock of the Company
into which this Warrant could have been exercised immediately prior to such
Event (without taking into account any limitations or restrictions on the
exercisability of this Warrant) would have been entitled. The terms of any such
Event shall include such terms so as to continue to give to the Holder the right
to receive the securities, cash or property set forth in this Section 5(g) upon
any exercise or redemption following such Event, and, in the case of an Event
specified in clause (A) above, the successor corporation or other entity (if
other than the Company) resulting from such reorganization, merger or
consolidation, or the person acquiring the properties and assets, or such other
controlling corporation or entity as may be appropriate, shall expressly assume
the obligation to deliver the securities or other assets which the Holder is
entitled to receive hereunder. The provisions of this Section 5(g) shall
similarly apply to successive Events. "Change of Control Transaction" means the
occurrence of any (i) merger or consolidation of the Company with or into
another entity, unless the holders of the Company's securities immediately prior
to such transaction or series of transactions continue to hold at least 50% of
such securities following such transaction or series of transactions, or (ii) a
sale, conveyance, lease, transfer or disposition of all or substantially all of
the assets of the Company in one or a series of related transactions.
(h) Issuances Below Exercise Price. Subject to the last paragraph of
this Section 5(h), if the Company, at any time while this Warrant is
outstanding:
(i) issues or sells, or is deemed to have issued or sold, any
Common Stock (other than any Excluded Securities (as defined below));
(ii) in any manner grants, issues or sells any rights, options,
warrants, options to subscribe for or to purchase Common Stock or any stock or
other securities convertible into or exchangeable for Common Stock (other than
any Excluded Securities) (such rights, options or warrants being herein called
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"Options" and such convertible or exchangeable stock or securities being herein
called "Convertible Securities") or reprices of any of the Company's issued and
outstanding Options or Convertible Securities (other than reprices triggered by
the issuance of this Warrant or any other warrants being issued on the date
hereof); or
(iii) in any manner issues or sells any Convertible Securities
(other than any Excluded Securities);
for (a) with respect to paragraph (i) above, a price per share, or (b) with
respect to paragraphs (ii) or (iii) above, a price per share for which Common
Stock is issuable upon the exercise of such Options (together with the price per
optioned share, if any, paid for the issuance of such Options) or upon
conversion or exchange of such Convertible Securities; in either case, which is
less than the Exercise Price in effect immediately prior to such issuance or
sale, then, immediately after such issuance, sale or grant, the Exercise Price
shall be adjusted by multiplying the Exercise Price then in effect by a
fraction, (x) the numerator of which shall be the sum of (1) the number of
shares of Common Stock outstanding immediately prior to such issue or sale, plus
(2) the number of shares of Common Stock which the aggregate consideration
received by the Company for such Common Stock or Convertible Securities,
together with any consideration receivable upon the exercise or conversion of
such Convertible Securities, then issued would purchase at the Exercise Price
then in effect; and (y) the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such issue or sale plus the number
of shares of Common Stock then issued or issuable upon the exercise of any
Convertible Securities then issued. No modification of the issuance terms shall
be made upon the actual issuance of such Common Stock upon conversion or
exchange of such Options or Convertible Securities.
"Excluded Securities" means (i) options to be granted pursuant to a stock
option plan approved by the stockholders of the Company or by Stanford
International Bank Ltd. ("Stanford"), (ii) shares of Common Stock issued upon
conversion or exercise of warrants, options or other securities convertible into
Common Stock which are or become outstanding on the date hereof or which are
described in clause (i) next above, (iii) shares of Common Stock or securities
convertible into or exercisable for shares of Common Stock issued or deemed to
be issued by the Company in connection with a strategic acquisition by the
Company of the assets or business, or division thereof, of another entity which
acquisition has been approved by Stanford in writing or by the stockholders of
the Company, (iv) issuances of rights in connection with the adoption of a
stockholder rights plan, or (v) any other issuance of securities referred to in
Sections 5(a), 5(b) or 5(c) above.
Notwithstanding anything herein to the contrary, no adjustment shall be
made to the Exercise Price hereunder as a result of the first 100,000 shares of
Common Stock issued or issuable upon the exercise of Options or the conversion
or exchange of Convertible Securities issued during any fiscal year of the
Company while this Warrant is outstanding. If this amount is exceeded in any
such fiscal year, the Exercise Price shall be adjusted in accordance with the
provisions hereof based solely on the shares of Common Stock sold or the
exercise price or conversion price of the Options and Convertible Securities
issued, as applicable, thereafter, without any adjustment in respect of the
initial 100,000 shares of Common Stock, Options or Convertible Securities issued
in such fiscal year.
(i) Effect on Exercise Price of Certain Events. For purposes of
determining the adjusted Exercise Price under Section 5(h), the following shall
be applicable:
(i) Calculation of Consideration Received. If any 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 gross amount received by the Company therefor, without deducting any
expenses paid or incurred by the Company or any commissions or compensations
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paid or concessions or discounts allowed to underwriters, dealers or others
performing similar services in connection with such issue or sale. In case any
Common Stock, Options or Convertible Securities are issued or sold for a
consideration other than cash, the amount of the consideration other than cash
received by the Company will be the fair value of such consideration, except
where such consideration consists of securities listed or quoted on a national
securities exchange or national quotation system, in which case the amount of
consideration received by the Company will be the arithmetic average of the
closing sale price of such security for the five (5) consecutive trading days
immediately preceding the date of receipt thereof. In case any Common Stock,
Options or Convertible Securities are issued to the owners of the non-surviving
entity in connection with any merger in which the Company 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 Common Stock, Options or Convertible Securities, as the
case may be. The fair value of any consideration other than cash or such listed
or quoted securities will be determined in good faith by the Board of Directors
of the Company.
(ii) Integrated Transactions. In case any Option is issued in
connection with the issue or sale of other securities of the Company, together
comprising one integrated transaction in which no specific consideration is
allocated to such Options by the parties thereto, the Options will be deemed to
have been issued for an aggregate consideration of $.002.
(iii) Record Date. If the Company takes a record of the holders of
Common Stock for the purpose of entitling them (a) to receive a dividend or
other distribution payable in Common Stock, Options or in Convertible Securities
or (b) to subscribe for or purchase 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 upon 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.
(iv) Other Events. If any event occurs that would adversely affect
the rights of the Holder of this Warrant but is not expressly provided for by
this Section 5 (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity features),
then the Company's Board of Directors will make an appropriate adjustment in the
Exercise Price so as to protect the rights of the Holder; provided, however,
that no such adjustment will increase the Exercise Price.
(j) Notice of Certain Events. If:
(i) the Company shall declare a dividend (or any other
distribution) on its Common Stock;
(ii) the Company shall declare a special nonrecurring cash dividend
on or a redemption of its Common Stock;
(iii) the Company shall authorize the granting to the holders of
all of its Common Stock rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights (other than issuances of
rights in connection with the adoption of a stockholder rights plan);
(iv) the approval of any stockholders of the Company shall be
required in connection with any capital reorganization, reclassification of the
Company's capital stock, any consolidation or merger to which the Company is a
party, any sale or transfer of all or substantially all of the assets of the
Company, or any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property; or
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(v) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company;
then the Company shall cause to be filed at each office or agency maintained for
the purpose of exercise of this Warrant, and shall cause to be delivered to the
Holder, at least 10 calendar days prior to the applicable record or effective
date hereinafter specified, a notice (provided the Company may exclude any
information which it deems to be material non-public information) stating (a)
the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be
determined, or (b) the date on which such reorganization, reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become
effective or close, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities, cash or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, transfer or share
exchange; provided, however, that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the corporate
action required to be specified in such notice. Nothing herein shall prohibit
the Holder from exercising this Warrant during the 10-day period commencing on
the date of such notice.
(k) Increase in Exercise Price. In no event shall any provision in this
Section 5 cause the Exercise Price to be greater than the Exercise Price on the
date of issuance of this Warrant, except for a reverse split or other
combination of the outstanding shares of Common Stock into a smaller number of
shares as referenced in Section 5(a) above. Notwithstanding anything to the
contrary in this Section 5, in the event of any adjustment of the Exercise Price
or in the securities into which this Warrant may be exercised, the Exercise
Price shall be increased as necessary such that the Exercise Price shall be not
less than the par value of the shares of capital stock for which this Warrant
may be exercised.
6. INVESTMENT INTENT
Unless, prior to the exercise of the Warrant, the issuance of the Warrant
Shares has been registered with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended (the "Securities Act"), the Warrant
Exercise Form shall be accompanied by a representation of the Holder to the
Company to the effect that such shares are being acquired for investment and not
with a view to the distribution thereof, and such other representations and
documentation as may be required by the Company, unless in the opinion of
counsel to the Company such representations or other documentation are not
necessary to comply with the Securities Act.
7. RESTRICTIONS ON TRANSFER
(a) Transfer to Comply with the Securities Act. Holder understands
that, unless a registration statement relating to the resale of this Warrant and
the Warrant Shares shall then be effective under the Securities Act, this
Warrant and the Warrant Shares shall be "restricted securities" (as that term is
defined in Rule 144 promulgated under the Securities Act). Neither this Warrant
nor any Warrant Shares or other securities issuable upon exercise hereof may be
sold, assigned, pledged, transferred or otherwise disposed of except in
compliance with applicable state securities or "blue sky" laws and as follows:
(1) to a person who, in the opinion of counsel satisfactory to the Company, is a
person to whom this Warrant or the Warrant Shares may legally be transferred
without registration and without the delivery of a current prospectus under the
Securities Act with respect thereto and then only against receipt of an
agreement of such person to comply with the provisions of this Section 7 with
respect to any resale, assignment, pledge, transfer or other disposition of such
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securities; or (2) to any person upon delivery of a prospectus then meeting the
requirements of the Securities Act relating to such securities and the offering
thereof for such sale, assignment, pledge, transfer or other disposition.
(b) Legend. Subject to the terms hereof, upon exercise of this Warrant
and the issuance of the Warrant Shares, all certificates representing such
Warrant Shares (or other securities issuable hereunder) shall bear on the face
or reverse thereof substantially the following legend (or another legend
substantially in such form as the transfer agent for the Company may from time
to time use generally on certificates evidencing restricted securities of the
Company):
THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND MAY NOT BE
SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A
REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE
UNDER SUCH ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR
THE COMPANY THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF SUCH ACT IS AVAILABLE.
8. REPRESENTATIONS AND WARRANTIES OF HOLDER
In connection with the issuance of this Warrant, Holder specifically
represents and warrants to the Company by acceptance of this Warrant as follows:
(a) If an entity, Holder is duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or formation,
and has the requisite entity power and authority to exercise the Warrant and
purchase the Warrant Shares.
(b) Holder is an "accredited investor" as defined in Rule 501(a)
promulgated under the Securities Act, and is not a registered broker-dealer
under Section 15 of the Exchange Act.
(c) Holder, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters so as
to be capable of evaluating the merits and risks of the prospective investment
in this Warrant and, upon exercise hereof, the Warrant Shares, and has so
evaluated the merits and risks of such investment. The undersigned is able to
bear the economic risk of an investment in this Warrant and the Warrant Shares
and, at the present time, is able to afford a complete loss of such investment.
(d) Holder is aware of the Company's business affairs and financial
condition, and has acquired information about the Company sufficient to reach an
informed and knowledgeable decision to acquire this Warrant.
(e) Holder is acquiring this Warrant for its own account for investment
purposes only and not with a view to, or for the resale in connection with, any
"distribution" thereof in violation of the Securities Act.
(f) Holder is not acquiring this Warrant or purchasing any Warrant
Shares as a result of any advertisement, article, notice or other communication
regarding this Warrant or the Warrant Shares published in any newspaper,
magazine or similar media or broadcast over television or radio or presented at
any seminar or any other general solicitation or general advertisement.
(g) Holder understands that neither this Warrant nor the Warrant Shares
has been registered under the Securities Act and neither may be offered, resold,
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pledged or otherwise transferred except (i) pursuant to an exemption from
registration under the Securities Act or pursuant to an effective registration
statement in compliance with Section 5 under the Securities Act, or (ii) in
accordance with all applicable securities and "blue sky" laws of the states of
the United States and other jurisdictions. Holder is aware of the provisions of
Rule 144 promulgated under the Securities Act.
(h) To the extent a registration statement under the Securities Act is
not in effect, Holder understands and acknowledges that (i) this Warrant is, and
the Warrant Shares (if any) will be, issued and sold to it without registration
under the Securities in a private placement that is exempt from the registration
provisions of the Securities , and (ii) the availability of such exemption
depends in part on, and that the Company and its counsel is relying upon, the
accuracy and truthfulness of the foregoing representations and Holder hereby
consents to such reliance.
9. LOST, STOLEN OR DESTROYED WARRANTS
In the event that the Holder certifies to the Company that this Warrant has
been lost, stolen or destroyed and provides (a) a letter, in form reasonably
satisfactory to the Company, to the effect that it will indemnify the Company
from any loss incurred by it in connection therewith, and/or (b) an indemnity
bond in such amount as is reasonably required by the Company, the Company having
the option of electing either (a) or (b) or both, the Company may, in its sole
discretion, accept such letter and/or indemnity bond in lieu of the surrender of
this Warrant as required by Section 1 hereof.
10. SUBSEQUENT HOLDERS
Every Holder hereof, by accepting the same, agrees with any subsequent
Holder hereof and with the Company that this Warrant and all rights hereunder
are issued and shall be held subject to all of the terms, conditions,
limitations and provisions set forth in this Warrant, and further agrees that
the Company and its transfer agent, if any, may deem and treat the registered
holder of this Warrant as the absolute owner hereof for all purposes and shall
not be affected by any notice to the contrary.
11. NOTICES
Any notice required or permitted hereunder shall be given in writing
(unless otherwise specified herein) and shall be effective upon personal
delivery, via facsimile or email (upon receipt of confirmation of error-free
transmission and mailing a copy of such confirmation, postage prepaid by
certified mail, return receipt requested) or two business days following deposit
of such notice with an internationally recognized courier service, with postage
prepaid and addressed the other party at the following address, or at such other
addresses as a party may designate by five days advance written notice to the
other party hereto.
Company: DGSE Companies, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇.▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy to: Sheppard, Mullin, ▇▇▇▇▇▇▇ & Hampton LLP
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▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Holder: Stanford International Bank Ltd.
c/o Stanford Financial Group
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy to: ▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇@▇▇▇▇▇▇.▇▇▇
12. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL
This Warrant shall be governed by and interpreted in accordance with the
laws of the State of Texas, without regard to its principles of conflict of
laws. Any action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Warrant may be brought against any party in the
federal courts of Texas or the state courts of the State of Texas, and each of
the parties consents to the jurisdiction of such courts and hereby waives, to
the maximum extent permitted by law, any objection, including any objections
based on forum non conveniens, to the bringing of any such proceeding in such
jurisdictions.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE
UNDER THIS WARRANT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (1) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH
WAIVERS, (2) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS,
(3) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (4) IT HAS BEEN INDUCED TO ENTER INTO
THIS WARRANT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 12.
13. WAIVER
This Warrant and any provision hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of the same is sought.
[ THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK ]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on its
behalf, in its corporate name, by its duly authorized officer, all as of the day
and year first above written.
DGSE COMPANIES, INC.
By:
-----------------------------------------
▇▇. ▇.▇. ▇▇▇▇▇
Chief Executive Officer
DGSE COMPANIES, INC.
WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise the attached Warrant
dated __________ _____, 200___ (the "Warrant"), pursuant to the provisions of
(SELECT ONE) [ Section 1(a) of the Warrant, to the extent of purchasing
_____________ shares (the "Shares") of the common stock, par value $0.01 per
share (the "Common Stock"), of DGSE Companies, Inc., a Nevada corporation (the
"Company"), and encloses herewith in cash or by certified or official bank check
or by wire transfer, payable to the order of the Company, a payment of
$_________ in payment therefor, which sum represents the aggregate Exercise
Price (as defined in the Warrant) for the Shares ] (OR) [ Section 1(b) of the
Warrant to the extent of _________ shares of the common stock, par value $0.01
per share (the "Common Stock"), of DGSE Companies, Inc., a Nevada corporation
(the "Company"), which based on an estimated Market Price of $_____ per share
would result in the issuance to the Holder of _______ shares (the "Shares") of
Common Stock ] .
As of the date hereof, the undersigned represents and warrants to the
Company as follows:
(a) If an entity, the undersigned is duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation or
formation, and has the requisite entity power and authority to exercise the
Warrant and purchase the Shares.
(b) The undersigned is an "accredited investor" as defined in Rule
501(a) promulgated under the Securities Act of 1933, as amended (the "Act"), and
is not a registered broker-dealer under Section 15 of the Securities Exchange
Act of 1934, as amended.
(c) The undersigned, either alone or together with its representatives,
has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the
prospective investment in the Shares, and has so evaluated the merits and risks
of such investment. The undersigned is able to bear the economic risk of an
investment in the Shares and, at the present time, is able to afford a complete
loss of such investment.
(d) The undersigned is aware of the Company's business affairs and
financial condition, and has acquired information about the Company sufficient
to reach an informed and knowledgeable decision to acquire this Warrant.
(e) The undersigned is acquiring the Shares for its own account for
investment purposes only and not with a view to, or for the resale in connection
with, any "distribution" thereof in violation of the Act.
(f) The undersigned is not purchasing the Shares as a result of any
advertisement, article, notice or other communication regarding the Common Stock
published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other general
solicitation or general advertisement.
(g) The undersigned understands that the Shares have not been
registered under the Act and may not be offered, resold, pledged or otherwise
transferred except (i) pursuant to an exemption from registration under the Act
or pursuant to an effective registration statement in compliance with Section 5
under the Act, or (ii) in accordance with all applicable securities and "blue
sky" laws of the states of the United States and other jurisdictions. The
undersigned is aware of the provisions of Rule 144 promulgated under the Act.
-1-
(h) To the extent a registration statement under the Act is not in
effect, the undersigned understands and acknowledges that (i) the Shares are
being issued and sold to it without registration under the Act in a private
placement that is exempt from the registration provisions of the Act, and (ii)
the availability of such exemption depends in part on, and that the Company and
its counsel is relying upon, the accuracy and truthfulness of the foregoing
representations and the undersigned hereby consents to such reliance.
Please issue a certificate or certificates representing the Shares in the
name of the undersigned or in the name of the undersigned's nominee as is
specified below. [ Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned or the undersigned's nominee as
is specified below. ]
---------------------------------
Name of Holder
---------------------------------
Signature of Holder
or Authorized Representative
---------------------------------
Social Security Number or
Tax Identification Number
---------------------------------
Signature, if jointly held
---------------------------------
Name and Title of Authorized
Representative
---------------------------------
---------------------------------
Address of Holder
---------------------------------
Nominee of Holder (if applicable)
---------------------------------
Date
-2-
DGSE COMPANIES, INC.
WARRANT ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ ("Assignee") the rights represented by the
within Warrant to purchase ____________ shares of common stock, par value $0.01
per share (the "Common Stock"), of DGSE Companies, Inc., a Nevada corporation
(the "Company"), to which the within Warrant relates and appoints
________________ attorney to transfer said right on the books of the Company
with full power of substitution in the premises. The undersigned has informed
Assignee that Assignee must make the representations and warranties contained in
this form in connection with said transfer, and the undersigned has no reason to
belief that Assignee cannot make such representations.
As of the date hereof, the Assignee represents and warrants to the Company
as follows:
(a) If an entity, Assignee is duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or formation,
and has the requisite entity power and authority to exercise the Warrant and
purchase the shares of Common Stock deliverable upon such exercise (the "Warrant
Shares").
(b) Assignee is an "accredited investor" as defined in Rule 501(a)
promulgated under the Securities Act of 1933, as amended (the "Act"), and is not
a registered broker-dealer under Section 15 of the Securities Exchange Act of
1934, as amended.
(c) Assignee, either alone or together with its representatives, has
such knowledge, sophistication and experience in business and financial matters
so as to be capable of evaluating the merits and risks of the prospective
investment in this Warrant and, upon exercise hereof, the Warrant Shares, and
has so evaluated the merits and risks of such investment. The undersigned is
able to bear the economic risk of an investment in this Warrant and the Warrant
Shares and, at the present time, is able to afford a complete loss of such
investment.
(d) Assignee is aware of the Company's business affairs and financial
condition, and has acquired information about the Company sufficient to reach an
informed and knowledgeable decision to acquire this Warrant.
(e) Assignee is acquiring this Warrant for its own account for
investment purposes only and not with a view to, or for the resale in connection
with, any "distribution" thereof in violation of the Act.
(f) Assignee is not acquiring this Warrant or purchasing any Warrant
Shares as a result of any advertisement, article, notice or other communication
regarding this Warrant or the Warrant Shares published in any newspaper,
magazine or similar media or broadcast over television or radio or presented at
any seminar or any other general solicitation or general advertisement.
(g) Assignee understands that neither the Warrant nor the Warrant
Shares has been registered under the Act and neither may be offered, resold,
pledged or otherwise transferred except (i) pursuant to an exemption from
registration under the Act or pursuant to an effective registration statement in
compliance with Section 5 under the Act, or (ii) in accordance with all
applicable securities and "blue sky" laws of the states of the United States and
other jurisdictions. The Assignee is aware of the provisions of Rule 144
promulgated under the Act.
-1-
(h) To the extent a registration statement under the Act is not in
effect, Assignee understands and acknowledges that (i) the Warrant is, and the
Warrant Shares (if any) will be, issued and sold to it without registration
under the Act in a private placement that is exempt from the registration
provisions of the Act, and (ii) the availability of such exemption depends in
part on, and that the Company and its counsel is relying upon, the accuracy and
truthfulness of the foregoing representations and the Assignee hereby consents
to such reliance.
Please issue a new Warrant of like tenor for the assigned portion of the
attached Warrant in the name of the Assignee or the Assignee's nominee as is
specified below. [ Please issue a new Warrant of like tenor for the unassigned
portion of the attached Warrant in the name of the undersigned or the
undersigned's nominee as is specified below. ]
-------------------------------------
Name of Holder
-------------------------------------
Signature of Holder
or Authorized Representative
-------------------------------------
Social Security Number or
Tax Identification Number of Holder
-------------------------------------
Signature, if jointly held
-------------------------------------
Name and Title of Authorized
Representative
-------------------------------------
-------------------------------------
Address of Holder
-------------------------------------
Nominee of Holder (if applicable)
-------------------------------------
Date
-2-
-------------------------------------
Name of Assignee
-------------------------------------
Signature of Assignee
or Authorized Representative
-------------------------------------
Social Security Number or
Tax Identification Number of Assignee
-------------------------------------
Signature, if to be jointly held
-------------------------------------
Name and Title of Authorized
Representative
-------------------------------------
-------------------------------------
Address of Assignee
-------------------------------------
Nominee of Assignee (if applicable)
-3-
