EXHIBIT 10.14
-------------
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY OTHER SECURITIES LAWS, HAVE BEEN
TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR TRANSFERRED OR
OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS
WITH RESPECT TO SUCH SECURITIES IS THEN IN EFFECT, OR IN THE
OPINION OF COUNSEL (WHICH OPINION IS REASONABLY SATISFACTORY TO
THE ISSUER OF THESE SECURITIES), SUCH REGISTRATION UNDER THE
SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS IS NOT
REQUIRED
PACIFIC CMA, INC.
(Incorporated under the laws of the State of Colorado)
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
Warrant price $1.93 per share, subject to adjustment as provided below.
PAW # 1
-------
THIS IS TO CERTIFY that, for value received, ROCKWOOD, INC.
and its registered assigns (collectively, the ("Holder"), is
entitled to purchase, subject to the terms and conditions
hereinafter set forth, up to ONE HUNDRED EIGHTY-SIX THOUSAND
THREE HUNDRED AND THIRTY-FIVE (186,335) shares of the common
stock, no par value ("Common Stock"), of PACIFIC CMA, INC., a
Colorado corporation (the "Company"), and to receive
certificate(s) for the Common Stock so purchased.
1. Exercise Period. The exercise period is the period beginning
on November 18, 2003 (the "Issuance Date") and ending at
5:00 p.m., New York time, on November 17, 2008 (the "Exercise
Period"). This Warrant will terminate automatically and
immediately upon the expiration of the Exercise Period.
2. Exercise of Warrant: This Warrant may be exercised, in whole
or in part, at any time and from time to time during the Exercise
Period. Such exercise shall be accomplished by tender to the
Company of the purchase price (the "Warrant Price"), either in
cash, by wire transfer or by certified check or bank cashier's
check, payable to the order of the Company, together with
presentation and surrender to the Company of this Warrant with an
executed subscription in substantially the form attached hereto
as Exhibit A (the "Subscription"). Upon receipt of the foregoing,
the Company will deliver to the Holder, as promptly as possible,
a certificate or certificates representing the shares of Common
Stock so purchased, registered in the name of the Holder or its
transferee (as permitted under Section 3 below). With respect to
any exercise of this Warrant, the Holder will for all purposes be
deemed to have become the holder of record of the number of
shares of Common Stock purchased hereunder on the date this
Warrant, a properly executed Subscription and payment of the
Warrant Price is received by the Company (the "Exercise Date"),
irrespective of the date of delivery of the certificate
evidencing such shares, except that, if the date of such receipt
is a date on which the stock transfer books of the Company are
closed, such person will 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. In the event this
Warrant is exercised in part, the Company shall issue a new
Warrant to the Holder covering the aggregate number of shares of
Common Stock as to which this Warrant remains exercisable for.
3. Transferability and Exchange.
-----------------------------
(a) This Warrant, and the Common Stock issuable upon the
exercise hereof, may not be sold, transferred, pledged or
hypothecated unless the Company shall have been provided with an
opinion of counsel, or other evidence reasonably satisfactory to
it, that such transfer is not in violation of the Securities Act,
and any applicable state securities laws. Subject to the
satisfaction of the aforesaid condition, this Warrant and the
underlying shares of Common Stock shall be transferable from time
to time by the Holder upon written notice to the Company. If this
Warrant is transferred, in whole or in part, the Company shall,
upon surrender of this Warrant to the Company, deliver to each
transferee a Warrant evidencing the rights of such transferee to
purchase the number of shares of Common Stock that such
transferee is entitled to purchase pursuant to such transfer. The
Company may place a legend similar to the legend at the top of
this Warrant on any replacement Warrant and on each certificate
representing shares issuable upon exercise of this Warrant or any
replacement Warrants. Only a registered Holder may enforce the
provisions of this Warrant against the Company. A transferee of
the original registered Holder becomes a registered Holder only
upon delivery to the Company of the original Warrant an original
assignment, substantially in the form set forth in Exhibit B
attached hereto. The Company agrees to cooperate with the Holder
to effectuate any such transfer.
(b) This Warrant is exchangeable upon its surrender by the
Holder to the Company for new Warrants of like tenor and date
representing in the aggregate the right to purchase the number of
shares purchasable hereunder, each of such new Warrants to
represent the right to purchase such number of shares as may be
designated by the Holder at the time of such surrender.
4. Adjustments to Warrant Price and Number of Shares Subject to
Warrant. The Warrant Price and the number of shares of Common
Stock purchasable upon the exercise of this Warrant are subject
to adjustment from time to time upon the occurrence of any of the
events specified in this Section 4. For the purpose of this
Section 4, "Common Stock" means shares now or hereafter
authorized of any class of common stock of the Company and any
other stock of the Company, however designated, that has the
right to participate in any distribution of the assets or
earnings of the Company without limit as to per share amount
(excluding, and subject to any prior rights of, any class or
series of preferred stock).
2
(a) In case the Company shall (i) pay a dividend or make a
distribution in shares of Common Stock or other securities,
(ii) subdivide its outstanding shares of Common Stock into a
greater number of shares, (iii) combine its outstanding shares of
Common Stock into a smaller number of shares, or (iv) issue by
reclassification of its shares of Common Stock other securities
of the Company, then the Warrant Price in effect at the time of
the record date for such dividend or on the effective date of
such subdivision, combination or reclassification, and/or the
number and kind of securities issuable on such date, shall be
proportionately adjusted so that the Holder of any Warrant
thereafter exercised shall be entitled to receive the aggregate
number and kind of shares of Common Stock (or such other
securities other than Common Stock) of the Company, at the same
aggregate Warrant Price, that, if such Warrant had been exercised
immediately prior to such date, the Holder would have owned upon
such exercise and been entitled to receive by virtue of such
dividend, distribution, subdivision, combination or
reclassification. Such adjustment shall be made successively
whenever any event listed above shall occur.
(b) In case the Company shall fix a record date for the
making of a distribution to all holders of Xxxxxx Stock (including
any such distribution made in connection with a consolidation or
merger in which the Company is the surviving corporation) of
cash, evidences of indebtedness or assets, or subscription rights
or warrants, the Warrant Price to be in effect after such record
date shall be determined by multiplying the Warrant Price in
effect immediately prior to such record date by a fraction, the
numerator of which shall be the current market price per share of
Common Stock on such record date, less the amount of cash so to
be distributed (or the fair market value (as determined in good
faith by, and reflected in a formal resolution of, the Board of
Directors of the Company) of the portion of the assets or
evidences of indebtedness so to be distributed, or of such
subscription rights or warrants, applicable to one share of
Common Stock, and the denominator of which shall be such current
market price per share of Common Stock. Such adjustment shall be
made successively whenever such a record date is fixed; and in
the event that such distribution is not so made, the Warrant
Price shall again be adjusted to be the Warrant Price which would
then be in effect if such record date had not been fixed.
(c) For the purpose of any computation under any subsection
of this Section 4, the "current market price" per share of Common
Stock on any date shall be the per share price of the Common
Stock on the trading day immediately prior to the event requiring
an adjustment hereunder and shall be: (i) if the principal
trading market of such securities is a national or regional
securities exchange, the closing price on such exchange on such
day; or (ii) if sales prices for shares of Common Stock are
reported by the Nasdaq National Market System or Small Cap Market
System (or a similar system then in use), the last reported sales
price so reported on such day; or (iii) if neither (i) nor
(ii) above are applicable, and if bid and ask prices for shares
of Common Stock are reported in the over-the-counter market by
Nasdaq (or, if not so reported, by the National Quotation
Bureau), the average of the high bid and low ask prices so
reported on such day. Notwithstanding the foregoing, if there is
no reported closing price, last reported sales price, or bid and
ask prices, as the case may be, for the day in question, then the
current market price shall be determined as of the latest date
prior to such day for which such closing price, last reported
sales price, or bid and ask prices, as the case may be, are
available, unless such securities have not been traded on an
exchange or in the over-the-counter market for thirty (30) or
3
more days immediately prior to the day in question, in which case
the current market price shall be determined in good faith by,
and reflected in a formal resolution of, the Board of Directors
of the Company.
(d) Notwithstanding any provision herein to the contrary, no
adjustment in the Warrant Price shall be required unless such
adjustment would require an increase or decrease of at least one
(1%) percent in the Warrant Price; provided, however, that any
adjustments which by reason of this subsection (d) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this
Section 4 shall be made to the nearest cent or the nearest one-
hundredth of a share, as the case may be.
(e) In the event that at any time, as a result of an adjustment
made pursuant to subsection (a) above, the Holder of any Warrant
thereafter exercised shall become entitled to receive any shares
of capital stock of the Company other than shares of Common
Stock, thereafter number 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 the shares of
Common Stock contained in this Section 4, and the other
provisions of this Warrant shall apply on like terms to any such
other shares.
(f) If the Company merges or consolidates into or with another
corporation or entity, or if another corporation or entity merges
into or with the Company (excluding such a merger in which the
Company is the surviving or continuing corporation and which does
not result in any reclassification, conversion, exchange, or
cancellation of the outstanding shares of Common Stock), or if
all or substantially all of the assets or business of the Company
are sold or transferred to another corporation, entity, or
person, then, as a condition to such consolidation, merger, or
sale (a "Transaction"), lawful and adequate provision shall be
made whereby the Holder shall have the right from and after the
Transaction to receive, upon exercise of this Warrant and upon
the terms and conditions specified herein and in lieu of the
shares of the Xxxxxx Stock that would have been issuable if this
Warrant had been exercised immediately before the Transaction,
such shares of stock, securities, or assets as the Holder would
have owned immediately after the Transaction if the Holder had
exercised this Warrant immediately before the effective date of
the Transaction.
5. Reservation of Share. The Company agrees at all times to
resere and hold available out of its authorized but unissued
shares of Common Stock the number of shares of Common Stock
issuable upon the full exercise of this Warrant. The Company
further covenants and agrees that all shares of Common Stock that
may be delivery upon the exercise of this Warrant will, upon
delivery, be fully paid and nonassessable and free from all
taxes, liens and charges with respect to the purchase thereof
hereunder.
6. Notices to Holder. Upon any adjustment of the Warrant Price
(or number of shares of Common Stock purchasable upon the
exercise of this Warrant) pursuant to Section 4, the Company
shall promptly thereafter cause to be given to the Holder written
notice of such adjustment. Such notice shall include the Warrant
Price (and/or the number of shares of Common Stock purchasable
upon the exercise of this Warrant) after such adjustment, and
shall set forth in reasonable detail the Company's method of
calculation and the facts upon which such calculations were
4
based. Where appropriate, such notice shall be given in advance
and included as a part of any notice required to be given under
the other provisions of this Section 7.
In the event of (a) any fixing by the Company of a record
date with respect to the holders of any class of securities of
the Company for the purpose of determining which of such holders
are entitled to dividends or other distributions, or any rights
to subscribe for, purchase or otherwise acquire any shares of
capital stock of any class or any other securities or property,
or to receive any other right, (b) any capital reorganization of
the Company, or reclassification or recapitalization of the
capital stock of the Company or any transfer of all or
substantially all of the assets or business of the Company to, or
consolidation or merger of the Company with or into, any other
entity or person, or (c) any voluntary or involuntary dissolution
or winding up of the Company, then and in each such event the
Company will give the Holder a written notice specifying, as the
case may be (i) the record date for the purpose of such dividend,
distribution, or right, and stating the amount and character of
such dividend, distribution, or right; or (ii) the date on which
any such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, conveyance, 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
(or such capital stock or securities receivable upon the exercise
of this Warrant) shall be entitled to exchange their shares of
Common Stock (or such other stock securities) for securities or
other property deliverable upon such event. Any such notice shall
be given at least ten (10) days prior to the earliest date
therein specified.
7. No Rights as a Stockholder. This Warrant does not entitle
the Holder to any voting rights or other rights as a stockholder
of the Company, nor to any other rights whatsoever except the
rights herein set forth.
8. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Company, the Holder and their
respective successors and permitted assigns.
9. Notices. The Company agrees to maintain a ledger of the
ownership of this Warrant (the "Ledger"). Any notice hereunder
shall be given by registered or certified mail if to the Company,
at its principal executive office and, if to the Holder, to its
address shown in the Ledger of the Company; provided, however,
that the Holder may at any time on three (3) days written notice
to the Company designate or substitute another address where
notice is to be given. Notice shall be deemed given and received
after a certified or registered letter, properly addressed with
postage prepaid, is deposited in the U.S. mail.
10. Severability. Every provision of this Warrant is intended to
be severable If any term or provision hereof is illegal or
invalid for any reason whatsoever, such illegality or invalidity
shall not affect the remainder of this Warrant.
11. Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of New York
without giving effect to the principles of choice of laws
thereof.
5
12. Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Warrant, the prevailing party shall
be entitled to recover reasonable attorneys' fees in addition to
its costs and expenses and any other available remedy.
13. Entire Agreement. This Warrant (including the Exhibits
attached hereto) constitutes the entire understanding between the
Company and the Holder with respect to the subject matter hereof,
and supersedes all prior negotiations, discussions, agreements
and understandings relating to such subject matter.
14. Piggyback Registrations. If at any time prior to the date
two (2) years from the date of this Warrant or such earlier date
when all shares of Common Stock issuable upon exercise of this
Warrant (the "Warrant Shares") (a) have been sold, or (b) may be
sold without volume restrictions pursuant to Rule 144(k) as
determined by the counsel to the Company pursuant to a written
opinion letter to such effect, addressed and acceptable to the
Company's transfer agent and the Holder, that there is not an
effective registration statement covering the Warrant Shares, and
the Company shall determine to prepare and file with the SEC a
registration statement relating to an offering for its own
account or the account of others under the Securities Act of any
of its equity securities, other than on Form S-4 or Form S-8
(each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business or
equity securities issuable in connection with the stock option or
other employee benefit plans, then the Company shall send to the
Holder a written notice of such determination and, if within
fifteen (15) days after the date of such notice, any such Holder
shall so request in writing, the Company shall include in such
registration statement all or any part of such Warrant Shares
such Holder requests to be registered, subject to customary
underwriter cutbacks applicable to all holders of registration
rights; provided, however, that (i) if, at any time giving
written notice of is intention to register any securities and
prior to the effective date of the registration statement filed
in connection with such registration, the Company determines for
any reason not to proceed with such registration, the Company
may, at its election, given written notice of such determination
to the Holders and, thereupon, will be relieved of its obligation
to register any Warrant Shares in connection with such
registration, and (ii) in case of a determination by the Company
to delay registration of its securities, the Company will be
permitted to delay the registration of the Warrant Shares for the
same period as the delay in registering such other securities..
(Remainder of page intentionally left blank)
6
IN WITNESS WHEREOF, the Company has caused this Warrant to
be executed by its duly authorized officer as of the date first
set forth above.
PACIFIC CMA, INC.
By: /s/ Xxxxxx Xxxxxxxxxxx
---------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: Executive Vice
President
Name of Holder: ROCKWOOD, INC.
--------------
Number of Shares: 186,335 @ 1.93 per share
------------------------
7
EXHIBIT A
----------
SUBSCRIPTION FORM
(To be Executed by the Holder to Exercise the Rights To
Purchase Common Stock Evidenced by the Within Warrant)
The undersigned hereby irrevocably subscribes for
_____________shares (the "Stock") of the Common Stock of Pacific
CMA, Inc. (the "Company") pursuant to and in accordance with the
terms and conditions of the attached Warrant (the "Warrant"), and
hereby makes payment of $_____________ therefore by [tendering
cash, wire transferring or delivering a certified check or bank
cashier's checks payable to the order of the Company]. The
undersigned requests that a certificate for the Stock be issued
in the name of the undersigned and be delivered to the
undersigned at the address stated below. If the Stock is not all
of the shares purchasable pursuant to the Warrant, the
undersigned requests that a new Warrant of like tenor for the
balance of the remaining shares purchasable thereunder be
delivered to the undersigned at the address stated below.
In connection with the issuance of the Stock, I hereby
represent to the Company that I am acquiring the Stock for my own
account for investment and not with a view to, or for resale in
connection with, a distribution of the shares within the
meaning of the Securities Act of 1933, as amended (the
"Securities Act").
I understand that because the Stock has not been registered
under the Securities Act, I must hold such Stock indefinitely
unless the Stock is subsequently registered and qualified under
the Securities Act or is exempt from such registration and
qualification. I shall make no transfer or disposition of the
Stock unless (a) such transfer or disposition can be made without
registration under the Securities Act by reason of a specific
exemption from such registration and such qualification, or (b) a
registration statement has been filed pursuant to the Securities
Act and has been declared effective with respect to such
disposition. I agree that each certificate representing the Stock
delivered to me shall bear substantially the same as set forth on
the front page of the Warrant.
I agree that each certificate representing the Stock
delivered to me shall bear substantially the same legend as set
forth on the front page of the Warrant.
[Remainder of page intentionally left blank]
I further agree that the Company may place stop orders on
the certificates evidencing the Stock with the transfer agent, if
any, to the same effect as the above legend. The legend and stop
transfer notice referred to above shall be removed only upon my
furnishing to the Company of an opinion of counsel (reasonably
satisfactory to the Company) to the effect that such legend may
be removed.
Dated: ------------------------------
------------------------- Signature
Address:
------------------------------
------------------------------
2
EXHIBIT B
---------
ASSIGNMENT
----------
(To be Executed by the Holder to Effect Transfer of the Attached Warrant)
FOR VALUE RECEIVED__________________hereby sells, assigns and
transfers to ________________________________________ the Warrant attached
hereto and the rights represented thereby to purchase _____________ shares
of Common Stock in accordance with the terms and conditions hereof, and
does hereby irrevocably constitute and appoint ___________________________
as attorney to transfer such Warrant on the books of the Company with full
power of substitution.
Dated: ___________________ ____________________________
Signature
Please print or type name: Please insert Social Security Number or
and Address of Assignee Taxpayer Identification
Number of Assignee
___________________________ ________________________________________
___________________________ ________________________________________
