EXHIBIT 10.13
WARRANT
TO PURCHASE COMMON STOCK OF
FOUNDERS FOOD & XXXXXXX LTD.
THIS CERTIFIES THAT, for good and valuable consideration, _______________
("Holder"), or his registered assigns, is entitled to subscribe for and purchase
from Founders Food & Xxxxxxx Ltd., a Minnesota corporation (the "Company"), at
any time commencing June 28, 1999, up to and including June 27, 2002 (the
"Expiration Date"), _______________ (_______) fully paid and nonassessable
shares of the Common Stock of the Company at the price of $1.25 per share (the
"Warrant Exercise Price"), subject to the provisions of Section 5 of this
Warrant. The shares which may be acquired upon exercise of this Warrant are
referred to herein as the "Warrant Shares." As used herein, the term "Holder"
means any party who acquires all or a part of this Warrant, or any record holder
or holders of the Warrant Shares issued upon exercise, whether in whole or in
part, of this Warrant; the term "Common Stock" means and includes the Company's
presently authorized Common Stock, and shall also include any capital stock of
any class of the Company hereafter authorized which shall not be limited to a
fixed sum or percentage in respect of the rights of the Holders thereof to
participate in dividends or in the distribution of assets upon the voluntary or
involuntary liquidation, dissolution, or winding up of the Company.
This Warrant is subject to the following provisions, terms and conditions:
1. EXERCISE; TRANSFERABILITY.
(a) The rights represented by this Warrant may be exercised by the Holder
hereof, in whole or in part (but not as to a fractional share of Common Stock),
by written notice of exercise (in the form attached hereto) delivered to the
Company at the principal office of the Company prior to the Expiration Date and
accompanied or preceded by the surrender of this Warrant together with a check
in payment of the Warrant Exercise Price for such shares.
(b) This Warrant may not be sold, transferred, assigned, hypothecated or
divided except as provided in Section 7 hereof.
2. EXCHANGE AND REPLACEMENT. Subject to Sections 1 and 7 hereof, this
Warrant is exchangeable upon the surrender hereof by the Holder to the Company
at its office for new Warrants of like tenor and date representing in the
aggregate the right to purchase the number of Warrant Shares purchasable
hereunder, each of such new Warrants to represent the right to purchase such
number of Warrant Shares (not to exceed the aggregate total number purchasable
hereunder) as shall be designated by the Holder at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction, or mutilation of this Warrant, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
will make and deliver a new Warrant of like tenor, in lieu of this Warrant. The
Company shall pay all expenses, taxes (other than stock transfer taxes), and
other charges payable in connection with the preparation, execution, and
delivery of Warrants pursuant to this Section 2.
3. ISSUANCE OF THE WARRANT SHARES.
(a) The Company agrees that the shares of Common Stock purchased hereby
shall be and are deemed to be issued to the Holder as of the close of business
on the date on which this Warrant shall have been surrendered and the payment
made for such Warrant Shares as provided herein. Subject to the provisions of
the next section, certificates for the Warrant Shares so purchased shall be
delivered to the Holder within a reasonable time, not exceeding fifteen (15)
days after the rights represented by this Warrant shall have been so exercised,
and, unless
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this Warrant has expired, a new Warrant representing the right to purchase the
number of Warrant Shares, if any, with respect to which this Warrant shall not
then have been exercised shall also be delivered to the Holder within such time.
(b) Notwithstanding the foregoing, however, the Company shall not be
required to deliver any certificate for Warrant Shares upon exercise of this
Warrant except in accordance with exemptions from the applicable securities
registration requirements or registrations under applicable securities laws.
Nothing herein, however, shall obligate the Company to effect registrations
under federal or state securities laws, except as provided in Section 9. If
registrations are not in effect and if exemptions are not available when the
Holder seeks to exercise the Warrant, the Warrant exercise period will be
extended, if need be, to prevent the Warrant from expiring, until such time as
either registrations become effective or exemptions are available, and the
Warrant shall then remain exercisable for a period of at least forty-five (45)
calendar days from the date the Company delivers to the Holder written notice of
the availability of such registrations or exemptions. The Holder agrees to
execute such documents and make such representations, warranties, and agreements
as may be required solely to comply with the exemptions relied upon by the
Company, or the registrations made, for the issuance of the Warrant Shares.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees that all
Warrant Shares will, upon issuance, be duly authorized and issued, fully paid,
nonassessable, and free from all taxes, liens, and charges with respect to the
issue thereof. The Company further covenants and agrees that during the period
within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized and reserved for the purpose of issue
or transfer upon exercise of the purchase rights evidenced by this Warrant a
sufficient number of shares of Common Stock to provide for the exercise of the
rights represented by this Warrant.
5. ANTIDILUTION ADJUSTMENTS. The provisions of this Warrant are subject to
adjustment as provided in this Section 5.
(a) The Warrant Exercise Price shall be adjusted from time to time such
that in case the Company shall hereafter:
(i) pay any dividends on any class of stock of the Company payable in
Common Stock or securities convertible into Common Stock;
(ii) subdivide its then outstanding shares of Common Stock into a greater
number of shares; or
(iii) combine outstanding shares of Common Stock, by reclassification or
otherwise;
then, in any such event, the Warrant Exercise Price in effect immediately prior
to such event shall (until adjusted again pursuant hereto) be adjusted
immediately after such event to a price (calculated to the nearest full cent)
determined by dividing (a) the number of shares of Common Stock outstanding
immediately prior to such event, multiplied by the then existing Warrant
Exercise Price, by (b) the total number of shares of Common Stock outstanding
immediately after such event (including the maximum number of shares of Common
Stock issuable in respect of any securities convertible into Common Stock), and
the resulting quotient shall be the adjusted Warrant Exercise Price per share.
An adjustment made pursuant to this subsection shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification. If, as a result of an adjustment
made pursuant to this subsection, the Holder of any Warrant thereafter
surrendered for exercise shall become entitled to receive shares of two or more
classes of capital stock or shares of Common Stock and other capital stock of
the Company, the Board of Directors of the Company (whose determination shall be
conclusive) shall determine the allocation of the adjusted Warrant Exercise
Price between or among shares of such classes of capital stock or shares of
Common Stock and other capital stock. All calculations under this subsection
shall be made to the nearest cent or to the nearest 1/100 of a share, as the
case may be. In the event that at any time as a result of an
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adjustment made pursuant to this subsection, the Holder of any Warrant
thereafter surrendered for exercise shall become entitled to receive any shares
of the Company other than shares of Common Stock, thereafter the Warrant
Exercise Price of such other shares so receivable upon exercise of any Warrant
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to Common Stock
contained in this Section.
(b) Upon each adjustment of the Warrant Exercise Price pursuant to Section
5(a) above, the Holder of each Warrant shall thereafter (until another such
adjustment) be entitled to purchase at the adjusted Warrant Exercise Price the
number of shares, calculated to the nearest full share, obtained by multiplying
the number of shares specified in such Warrant (as adjusted as a result of all
adjustments in the Warrant Exercise Price in effect prior to such adjustment) by
the Warrant Exercise Price in effect prior to such adjustment and dividing the
product so obtained by the adjusted Warrant Exercise Price.
(c) In case of any consolidation or merger to which the Company is a party,
other than a merger or consolidation in which the Company is the continuing
corporation, or in case of any sale or conveyance to another corporation of the
property of the Company as an entirety or substantially as an entirety, or in
the case of any statutory exchange of securities with another corporation
(including any exchange effected in connection with a merger of a third
corporation into the Company), there shall be no adjustment under subsection (a)
of this Section above but the Holder of each Warrant then outstanding shall have
the right thereafter to convert such Warrant into the kind and amount of shares
of stock and other securities and property which the Holder would have owned or
have been entitled to receive immediately after such consolidation, merger,
statutory exchange, sale, or conveyance had such Warrant been converted
immediately prior to the effective date of such consolidation, merger, statutory
exchange, sale, or conveyance and in any such case, if necessary, appropriate
adjustment shall be made in the application of the provisions set forth in this
Section with respect to the rights and interests thereafter of any Holders of
the Warrant, to the end that the provisions set forth in this Section shall
thereafter correspondingly be made applicable, as nearly as may reasonably be,
in relation to any shares of stock and other securities and property thereafter
deliverable on the exercise of the Warrant. The provisions of this subsection
shall similarly apply to successive consolidations, mergers, statutory
exchanges, sales or conveyances.
(d) Upon any adjustment of the Warrant Exercise Price, then and in each
such case, the Company shall give written notice thereof, by first-class mail,
postage prepaid, addressed to the Holder as shown on the books of the Company,
which notice shall state the Warrant Exercise Price resulting from such
adjustment and the increase or decrease, if any, in the number of shares of
Common Stock purchasable at such price upon the exercise of this Warrant,
setting forth in reasonable detail the method of calculation and the facts upon
which such calculation is based.
6. NO VOTING RIGHTS. This Warrant shall not entitle the Holder to any
voting rights or other rights as a shareholder of the Company.
7. NOTICE OF TRANSFER OF WARRANT OR RESALE OF THE WARRANT SHARES.
(a) Subject to the sale, assignment, hypothecation, or other transfer
restrictions set forth in Section 1 hereof, the Holder, by acceptance hereof,
agrees to give written notice to the Company before transferring this Warrant or
transferring any Warrant Shares of such Xxxxxx's intention to do so, describing
briefly the manner of any proposed transfer. Promptly upon receiving such
written notice, the Company shall present copies thereof to the Company's
counsel and to counsel to the original purchaser of this Warrant. If in the
opinion of each such counsel the proposed transfer may be effected without
registration or qualification (under any federal or state securities laws), the
Company, as promptly as practicable, shall notify the Holder of such opinion,
whereupon the Holder shall be entitled to transfer this Warrant or to dispose of
Warrant Shares received upon the previous exercise of this Warrant, all in
accordance with the terms of the notice delivered by the Holder to the Company;
provided that an appropriate legend may be endorsed on the Warrant or the
certificates representing such Warrant Shares respecting restrictions upon
transfer thereof necessary or advisable in the opinion of counsel and
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satisfactory to the Company to prevent further transfers which would be in
violation of Section 5 of the Securities Act of 1933, as amended (the "Act"),
and applicable state securities laws; and provided further that the prospective
transferee or purchaser shall execute such documents and make such
representations, warranties, and agreements as may be required solely to comply
with the exemptions relied upon by the Company or the Holder for the transfer or
disposition of the Warrant or Warrant Shares.
(b) If in the opinion of counsel referred to in this Section 7, the
proposed transfer or disposition of this Warrant or such Warrant Shares
described in the written notice given pursuant to this Section 7 may not be
effected without registration or qualification of this Warrant or such Warrant
Shares, the Company shall promptly give written notice thereof to the Holder.
8. FRACTIONAL SHARES. Fractional shares shall not be issued upon the
exercise of this Warrant, but in any case where the Holder would, except for the
provisions of this Section, be entitled under the terms hereof to receive a
fractional share, the Company shall, upon the exercise of this Warrant for the
largest number of whole shares then called for, pay a sum in cash equal to the
sum of (a) the excess, if any, of the Market Price of such fractional share over
the proportional part of the Warrant Exercise Price represented by such
fractional share, plus (b) the proportional part of the Warrant Exercise Price
represented by such fractional share. For purposes of this Section, the term
"Market Price" with respect to shares of Common Stock of any class or series
means the last reported sale price or, if none, the average of the last reported
closing bid and asked prices on any national securities exchange, the Nasdaq
National Market or Nasdaq SmallCap Market, or if not listed on a national
securities exchange or quoted on Nasdaq, the average of the last reported
closing bid and asked prices as reported in the "pink sheets" or other standard
compilation of quotations by market makers in the over-the-counter market.
9. REGISTRATION RIGHTS.
(a) If at any time before June 27, 2004, the Company proposes to register
under the Act (except by a Form S-4 or Form S-8 Registration Statement or any
successor forms thereto) or qualify for a public distribution under Section 3(b)
of the Act, any of its equity securities or debt with equity features, it will
give written notice to all Holders of this Warrant, any Warrants issued pursuant
to Section 2 or Section 3(a) hereof, and any Warrant Shares of its intention to
do so and, on the written request of any such Holder given within twenty (20)
days after receipt of any such notice (which request shall specify the interest
in this Warrant or the Warrant Shares intended to be sold or disposed of by such
Holder and describe the nature of any proposed sale or other disposition
thereof), the Company will use its best efforts to cause all Warrant Shares, the
Holders of which shall have requested the registration or qualification thereof,
to be included in such Registration Statement proposed to be filed by the
Company; provided, however, that if a greater number of Warrant Shares is
offered for participation in the proposed offering than in the reasonable
opinion of the managing underwriter of the proposed offering can be accommodated
without adversely affecting the proposed offering, then the amount of Warrants
and Warrant Shares proposed to be offered by such Holders for registration, as
well as the number of securities of any other selling shareholders participating
in the registration, shall be proportionately reduced to a number deemed
satisfactory by the managing underwriter.
(b) With respect to each inclusion of securities in a Registration
Statement pursuant to this Section 9, the Company shall bear the following fees,
costs, and expenses: all registration, filing and NASD fees, Nasdaq fees,
printing expenses, fees and disbursements of counsel and accountants for the
Company, fees and disbursements of counsel for the underwriter or underwriters
of such securities (if the offering is underwritten and the Company is required
to bear such fees and disbursements), all internal expenses, the premiums and
other costs of policies of insurance against liability arising out of the public
offering, and legal fees and disbursements and other expenses of complying with
state securities laws of any jurisdictions in which the securities to be offered
are to be registered or qualified. Fees and disbursements of special counsel and
accountants for the selling Holders, underwriting discounts and commissions, and
transfer taxes for selling Holders and any other expenses relating to the sale
of securities by the selling Holders not expressly included above shall be borne
by the selling Holders.
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(c) The Company hereby indemnifies each of the Holders of this Warrant and
of any Warrant Shares, and the officers and directors, if any, who control such
Holders, within the meaning of Section 15 of the Act, against all losses,
claims, damages, and liabilities caused by (1) any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement or
Prospectus (and as amended or supplemented if the Company shall have furnished
any amendments thereof or supplements thereto), any Preliminary Prospectus or
any state securities law filings; (2) 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, or liabilities are caused by any untrue statement or omission contained
in information furnished in writing to the Company by such Holder expressly for
use therein; and each such Holder by its acceptance hereof severally agrees that
it will indemnify and hold harmless the Company, each of its officers who signs
such Registration Statement, and each person, if any, who controls the Company,
within the meaning of Section 15 of the Act, with respect to losses, claims,
damages, or liabilities which are caused by any untrue statement or omission
contained in information furnished in writing to the Company by such Holder
expressly for use therein.
IN WITNESS WHEREOF, Founders Food & Xxxxxxx Ltd. has caused this Warrant to
be signed by its duly authorized officer this 27th day of June, 1999.
Founders Food & Xxxxxxx Ltd.
By
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Xxxxxx X. Xxxxxxxxx
Chief Executive Officer
RESTRICTION ON TRANSFER
The securities evidenced hereby have not been registered under the
Securities Act of 1933, as amended, or any state securities laws and may not be
sold, transferred, assigned, offered, pledged or otherwise distributed for value
unless there is an effective registration statement under such act or laws
covering such security or the Company receives an opinion of counsel for the
Company stating that such sale, transfer, assignment, pledge or distribution is
exempt from the registration and prospectus delivery requirements of the
Securities Act of 1933, as amended, and all applicable state securities laws.
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FOUNDERS FOOD & XXXXXXX LTD.
WARRANT EXERCISE NOTICE
(TO BE SIGNED ONLY UPON EXERCISE OF WARRANT)
The undersigned, the Holder of the foregoing Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, ___________________________ shares of the Common Stock of
Founders Food & Xxxxxxx Ltd. to which such Warrant relates and herewith makes
payment of $____________ therefor in cash or by certified or cashier's check and
requests that the certificate for such shares be issued in the name of, and be
delivered to _________________________________________, whose address is set
forth below the signature of the undersigned. If the number of shares purchased
is less than all of the shares purchasable under the Warrant, a new Warrant will
be issued in the name of the undersigned for the remaining balance remaining of
the shares purchasable thereunder.
Name of Warrant Holder:
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(Please print)
Address of Warrant Holder:
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Tax Identification No. or
Social Security No. of Warrant Holder:
Signature:
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NOTE: THE ABOVE SIGNATURE SHOULD CORRESPOND
EXACTLY WITH THE NAME OF THE WARRANT HOLDER
AS IT APPEARS ON THE FIRST PAGE OF THE
WARRANT OR ON A DULY EXECUTED WARRANT
ASSIGNMENT.
Dated:
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FOUNDERS FOOD & XXXXXXX LTD.
CONVERSION NOTICE
(TO BE SIGNED ONLY UPON EXERCISE OF WARRANT PURSUANT TO SECTION 10)
The undersigned hereby irrevocably elects to exercise the conversion right
provided in Section 10 of the within Warrant for, and to acquire thereunder,
_______________ shares of Common Stock. If said number of shares shall not be
all the shares purchasable under the within Warrant, a new warrant is to be
issued in the name of said undersigned for the balance remaining of the shares
purchasable thereunder.
The undersigned hereby requests that the certificate for such shares be
issued in the name and delivered to the address set forth below.
Name of Warrant Holder:
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(Please print)
Address of Warrant Holder:
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--------------------------------------------
Tax Identification No. or
Social Security No. of Warrant Holder:
Signature:
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NOTE: THE ABOVE SIGNATURE SHOULD CORRESPOND
EXACTLY WITH THE NAME OF THE WARRANT HOLDER
AS IT APPEARS ON THE FIRST PAGE OF THE
WARRANT OR ON A DULY EXECUTED WARRANT
ASSIGNMENT.
Dated:
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FOUNDERS FOOD & XXXXXXX LTD.
WARRANT ASSIGNMENT
(TO BE SIGNED ONLY UPON TRANSFER OF WARRANT)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________________________________________________, the assignee,
whose address is ___________________________________________________, and whose
tax identification or social security number is _______________________, the
right represented by the foregoing Warrant to purchase ___________________
shares of the Common Stock of Founders Food & Xxxxxxx Ltd. to which the
foregoing Warrant relates and appoints ____________________________ attorney to
transfer said right on the books of Founders Food & Xxxxxxx Ltd., with full
power of substitution in the premises. If the number of shares assigned is less
than all of the shares purchasable under the Warrant, a new Warrant will be
issued in the name of the undersigned for the remaining balance of the shares
purchasable thereunder.
Name of Warrant Holder/Assignor:
---------------------------------------------
(Please print)
Address of Warrant Holder/Assignor:
---------------------------------------------
---------------------------------------------
Tax Identification No. or
Social Security No. of Warrant
Holder/Assignor:
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Signature:
-----------------------------------
NOTE: THE ABOVE SIGNATURE SHOULD CORRESPOND
EXACTLY WITH THE NAME OF THE WARRANT HOLDER
AS IT APPEARS ON THE FIRST PAGE OF THE
WARRANT OR ON A DULY EXECUTED WARRANT
ASSIGNMENT.
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