Exhibit 10.6
AVAILENT FINANACIAL, INC.
COMMON STOCK WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS THERE IS
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH SALE OR TRANSFER IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
This certifies that, for good and valuable consideration, receipt of which
is hereby acknowledged by Availent Financial, Inc., a Delaware corporation (the
"Company"), and subject to the terms and conditions of this Warrant, Broyd,
Inc., a Texas corporation ( the "Holder"), is entitled to purchase 2,275,000
shares of the common stock ("Common Stock") of the Company, on or before 5:00
p.m. Texas time, on December 31, 2008 (the "Expiration Date"), at which time
this Warrant will expire and become void unless earlier terminated as provided
herein. The shares of Common Stock of the Company for which this Warrant is
exercisable as adjusted from time to time pursuant to the terms hereof, are
hereinafter referred to as the "Shares."
1. EXERCISE PRICE. The initial purchase price for the Shares shall be $0.50
per share. Such price shall be subject to adjustment pursuant to the terms
hereof (such price, as adjusted from time to time, is hereinafter referred
to as the "Exercise Price").
2. EXERCISE AND PAYMENT.
(a) At any time before December 31, 2008, this Warrant may be exercised,
in whole or in part, from time to time by the Holder, during the term
hereof, by surrender of this Warrant and the Notice of Exercise
annexed hereto duly completed and executed by the Holder to the
Company at the principal executive offices of the Company, together
with payment in the amount obtained by multiplying the Exercise Price
then in effect by the number of Shares thereby purchased, as
designated in the Notice of Exercise (the "Exercise Time"). Payment
may be in cash or by check payable to the order of the Company.
(b) Notwithstanding any other provisions of this paragraph 2, the Holder
shall have the right, in lieu of exercising this Warrant by payment of
cash or by check, to pay all or a portion of the aggregate Exercise
Price by making a "cashless exercise," in which case the portion of
the aggregate Exercise Price to be so paid shall be paid by reducing
the number of shares of Common Stock otherwise issuable pursuant to
the Notice of Exercise by an amount equal to (i) the aggregate
Exercise Price to be so paid divided by (ii) the Fair Market Value of
one share of Common Stock. As used herein, the "Fair Market Value" of
one share of Common Stock means:
(i) if the Common Stock is listed or admitted to trade on a national
securities exchange or national market system, the closing price
of the Common Stock, as published in the Wall Street Journal or,
if there is no trading of the Common Stock on such date, then the
closing price on the next preceding date on which there was
trading of such shares;
(ii) if the Common Stock is not listed or admitted to trade on a
national securities exchange or national market system, the mean
between the bid and asked price for the Common Stock on such
date, as furnished by the National Association of Securities
Dealers, Inc., through Nasdaq or a similar organization if Nasdaq
is no longer reporting such information; or (iii) if the Common
Stock is not listed or admitted to trade on a national securities
exchange or national market system and if bid and asked price for
the Common Stock are not so furnished through Nasdaq or a similar
organization, the market value established in good faith by the
Company's Board of Directors.
3. DELIVERY OF STOCK CERTIFICATES.
(a) Within a reasonable time after exercise (but not exceeding 10 business
days), in whole or in part, of this Warrant, the Company shall issue
in the name of and deliver to the Holder (or such other name as shall
be designated by said Holder), a certificate or certificates for the
number of shares of Common Stock which the Holder shall have requested
in the Notice of Exercise. If this Warrant is exercised in part, the
Company shall deliver to the Holder a new Warrant for the unexercised
portion of this Warrant at the time of delivery of such stock
certificate or certificates. The Company shall pay all expenses and
charges payable in connection with the preparation, execution and
delivery of stock certificates (and any new warrant) pursuant to this
paragraph 1.
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(b) The Shares purchased upon the exercise of this Warrant shall be deemed
to have been issued to the Holder at the Exercise Time, and the Holder
shall be deemed for all purposes to have become the record holder of
such Shares at the Exercise Time.
(c) The Company covenants that all shares of Common Stock which may be
issued upon the exercise of this Warrant will be duly authorized and
validly issued and, upon issuance in accordance with the terms and
conditions hereof, fully paid and nonassessable.
4. NO FRACTIONAL SHARES. No fractional shares or script representing
fractional shares will be issued upon exercise of this Warrant. If upon any
exercise of this Warrant a fraction of a share results, an amount equal to
such fraction multiplied by the Fair Market Value of one share of Common
Stock shall be paid in cash to the Holder.
5. CHARGES, TAXES AND EXPENSES. The Company shall pay all transfer taxes or
other incidental charges, if any, in connection with the transfer of the
Shares purchased pursuant to the exercise hereof from the Company to the
Holder.
6. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. 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 the
Company, and upon surrender and cancellation of this Warrant, if mutilated,
the Company will make and deliver a new Warrant of like tenor and dated as
of such cancellation, in lieu of this Warrant.
7. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day for the
taking of any action or the expiration of any right required or granted
herein shall be a Saturday or a Sunday or shall be a legal holiday, then
such action may be taken or such right may be exercised on the next
succeeding weekday which is not a legal holiday.
8. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number of and kind
of securities purchasable upon exercise of this Warrant and the Exercise
Price shall be subject to adjustment from time to time as follows:
(a) SUBDIVISIONS, COMBINATIONS AND OTHER ISSUANCES. If the Company shall
at any time after the date hereof but prior to the expiration of this
Warrant subdivide its outstanding securities as to which purchase
rights under this Warrant exist, by split-up or otherwise, or combine
its outstanding securities as to which purchase rights under this
Warrant exist, the number of Shares as to which this Warrant is
exercisable as of the date of such subdivision, split-up or
combination shall forthwith be proportionately increased in the case
of a subdivision, or proportionately decreased in the case of a
combination. Appropriate adjustments shall also be made to the
purchase price payable per share, but the aggregate purchase price
payable for the total number of Shares purchasable under this Warrant
as of such date shall remain the same.
(b) STOCK DIVIDEND; OTHER DISTRIBUTIONS. If at any time after the date
hereof the Company declares a dividend or other distribution on Common
Stock payable in Common Stock or other securities or rights
convertible into Common Stock ("Common Stock Equivalents") without
payment of any consideration by such holder for the additional shares
of Common Stock or the Common Stock Equivalents (including the
additional shares of Common Stock issuable upon exercise or conversion
thereof), then the number of shares of Common Stock for which this
Warrant may be exercised shall be increased as of the record date (or
the date of such dividend distribution if no record date is set) for
determining which holders of Common Stock shall be entitled to receive
such dividend, in proportion to the increase in the number of
outstanding shares (and shares of Common Stock issuable upon
conversion of all such securities convertible into Common Stock) of
Common Stock as a result of such dividend, and the Exercise Price
shall be adjusted so that the aggregate amount payable for the
purchase of all the Shares issuable hereunder immediately after the
record date (or on the date of such distribution, if applicable), for
such dividend shall equal the aggregate amount so payable immediately
before such record date (or on the date of such distribution, if
applicable).
(c) MERGER.
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(i) After (A) a consolidation, merger or reorganization of the
Company with or into any other entity or entities or (B) the
sale, conveyance or disposition of all or substantially all of
the assets of the Company; unless, upon consummation of such
event, the holders of the voting securities of the Company prior
to such event own, directly or indirectly, more than fifty
percent (50%) of the voting power to elect directors of the
consolidated or surviving or acquired entity (each a "Change of
Control Transaction"), then, the Warrant shall be exercisable
for, and the Holder of the Warrant shall be entitled to receive,
such number of shares of stock or other securities or property to
which such Holder would have been entitled upon such Change of
Control Transaction if, as of the record date fixed for
determining the holders of shares of Common Stock entitled to
receive such consideration, such Holder had been the holder of
record of the number of shares of Common Stock for which the
Warrant was then exercisable.
(ii) The Company shall not effect any Change of Control Transaction
contemplated by this Section 8(c) unless prior to or
simultaneously with the consummation thereof the successor or
acquirer, as the case may be, shall assume by written instrument
the obligation to deliver to the Holder of the Warrant such
shares of stock, securities or other property as, in accordance
with this Section 8(c), such Holder is entitled to receive.
(d) RECLASSIFICATION, ETC. If at any time after the date hereof there
shall be a change or reclassification of the securities (other than as
provided for in (a)(b) or (c)) as to which purchase rights under this
Warrant exist into the same or a different number of securities of any
other class or classes, then the Holder shall thereafter be entitled
to receive upon exercise of this Warrant, during the period specified
herein and upon payment of the Exercise Price then in effect, the
number of shares or other securities or property resulting from such
change or reclassification, which would have been received by Holder
for the shares of stock subject to this Warrant had this Warrant at
such time been exercised.
(e) CERTAIN SALES OF COMMON SHARES. If after the date hereof the Company
shall issue or sell any shares of its Common Stock, Options or
Convertible Securities for no consideration or for a consideration per
share (determined as provided in Section 8(f) below) less than the
Exercise Price then in effect, then, concurrently with such issue or
sale of such shares of Common Stock, Options or Convertible
Securities, the Exercise Price in effect immediately prior thereto
shall be reduced to the price determined by multiplying such Exercise
Price by a fraction, (i) the numerator of which shall be the number of
shares of Common Stock outstanding on a fully diluted basis
immediately prior to such issue, plus the number of shares of Common
Stock that the aggregate consideration received by the Company for the
total number of shares of Common Stock so issued would purchase at
such Exercise Price and (ii) the denominator of which shall be the
number of shares of Common Stock outstanding on a fully diluted basis
immediately prior to such issue plus the number of such shares of
Common Stock so issued.
(f) COMPUTATION OF CONSIDERATION. For the purposes of this Section 8:
(i) the consideration for the issue or sale of any shares of Common
Stock shall, irrespective of the accounting treatment of such
consideration,
(x) insofar as it consists of cash, be computed at the gross
amount of cash received by the Company, without deducting
any expenses paid or incurred by the Company or any
commission or compensation paid or concessions or discounts
allowed to underwriters, dealers or others performing
similar services in connection with such issue or sale;
(y) insofar as it consists of property (including securities)
other than cash, be computed at the fair market value
thereof at the time of such issue or sale, as determined in
good faith by the Board of Directors of the Company; and
(z) in case shares of Common Stock are issued or sold together
with other stock or securities or other assets of the
Company for consideration that covers both, be the portion
of such consideration so received, computed as provided in
clauses (x) and (y) above, allocable to such shares of
Common Stock, all as determined in good faith by the Board
of Directors of the Company;
(ii) shares of Common Stock deemed to have been issued pursuant to
Section 8(e) relating to Options and Convertible Securities,
shall be deemed to have been issued for a consideration per share
determined by dividing
(x) the total amount, if any, received and receivable by the
Company as consideration for the issue, sale, grant or
assumption of such Options or Convertible Securities, plus
the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without
regard to any provision contained therein for a subsequent
adjustment of such consideration) payable to the Company
upon the exercise in full of such Options or the conversion
or exchange of such Convertible Securities, or, in the case
of Options for Convertible Securities, the exercise of such
Options for Convertible Securities and the conversion or
exchange of such Convertible Securities, in each case
computing such consideration as provided in the foregoing
subsection (i),
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by
(y) the maximum number of shares of Common Stock (as set forth
in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of
such number) issuable upon the exchange of such Options or
the conversion or exchange of such Convertible Securities.
(g) For the purposes of this Section 8, unless the context otherwise
requires, the following terms shall have the following meanings:
(i) "Convertible Securities" means any evidence of indebtedness,
shares of stock (other than Common Stock) or other securities
directly or indirectly convertible into or exchangeable for
Common Stock.
(ii) "Options" means any rights, options or warrants to subscribe for,
purchase or otherwise acquire either Common Stock or Convertible
Securities.
9. NOTICE OF ADJUSTMENTS; NOTICES. Whenever the Exercise Price or number of
Shares purchasable hereunder shall be adjusted pursuant to Section 8
hereof, the Company shall execute and deliver to the Holder a certificate
setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was
calculated and the Exercise Price and number of shares purchasable
hereunder after giving effect to such adjustment, and shall cause a copy of
such certificate to be mailed (by first class mail, postage prepaid) to the
Holder.
10. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company covenants and
agrees that all Shares will be duly authorized and validly issued and, upon
issuance in accordance with the terms and conditions hereof, will be fully
paid and nonassessable and free from all taxes, liens and charges with
respect to the issue thereof. Without limiting the generality of the
foregoing, the Company covenants and agrees that it will from time to time
take all such action as may be requisite to assure that the par value per
Share is at all times equal to or less than the Exercise Price then in
effect. 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 upon exercise of the subscription 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 and any other Warrants.
11. REGISTRATION RIGHTS.
(a) As used in this Agreement, the following terms shall have the
following respective meanings:
(ii) "Holders" means any Holder holding Registrable Securities and any
other person or entity holding Registrable Securities to whom the
registration rights granted in this Warrant have been transferred
pursuant to the terms hereof;
(ii) The terms "register", "registered", and "registration" refer to a
registration effected by preparing and filing a registration
statement in compliance with the Securities Act and the
declaration or ordering of effectiveness of such registration
statement.
(iii) "Registrable Securities" means Shares of Common Stock issuable
upon exercise of the Warrant or issued or issuable pursuant to
any stock split, stock dividend, recapitalization or like
transaction with respect to such shares.
(iv) "SEC" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
(v) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and
regulations of the Commission thereunder, all as the same shall
be in effect at the time.
(b) If at any time the Company determines or is requested or receives a
demand (pursuant to an agreement binding on the Company) from any
person or entity to register under the Securities Act for sale to the
public any of the Company's securities on a form that also would
permit the registration under the Securities Act for sale to the
public of any Registrable Securities, it will give written notice to
the holder(s) of the Warrants or Shares. Upon written request of the
holder(s) of the Warrant or Shares, the Company shall use its best
efforts to cause the Shares requested by the holder(s) thereof (but in
no event an amount greater than 1,137,500 (subject to adjustment for
any stock split, stock dividend, recapitalization or like transaction
with respect to such shares) to be included in the securities to be
covered by the registration statement proposed to be filed by the
Company. The number of Shares to be included in such an offering may
be reduced if and to the extent that the managing underwriter, if any,
shall be of the opinion that such inclusion would adversely affect the
marketing of the securities to be sold by the Company therein. All
reasonable expenses incurred in connection with all registrations
under this Warrant and the "blue sky" qualifications, including,
without limitation, all registration and qualification fees, printers'
and accounting fees and fees and disbursements of counsel for the
Company, shall be borne by the Company. Any fees and disbursements of
counsel for Holder shall be the responsibility of Holder.
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(c) The registration rights of any Holder (and of any permitted transferee
of any Holder or such Holder's permitted transferees) under this
Agreement with respect to any Registrable Securities may be
transferred to any transferee who acquires (otherwise than in a
registered public offering) such Registrable Securities in compliance
with the terms of this Warrant.
(d) To the extent permitted by law, the Company will indemnify and hold
harmless each of the participating Holders, each underwriter that
participates in such registration and each person, if any, who
controls any participating Holder or any such underwriter and each
director, officer, agent, partner or shareholder of any participating
Holder and each such underwriter or control person (collectively, the
"Participating Holder Indemnitees") against any losses, claims,
damages or liabilities, joint or several, to which any Participating
Holder Indemnitee becomes subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based on any untrue or
alleged untrue statement of any material fact contained in such
registration statement, including, without limitation, any prospectus
contained therein or any amendments or supplements thereto, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or arise out of any
violation by the Company of any rule or regulation promulgated under
the Securities Act applicable to the Company and relating to action or
inaction required of the Company in connection with any such
registration; and will reimburse each Participating Holder Indemnitee
for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such loss, claim,
damage, liability or action.
(e) This Section 11 shall survive the termination of this Warrant.
12. CERTAIN AGREEMENTS OF THE COMPANY. The Company covenants and agrees that:
(a) Certain Actions Prohibited. The Company will not, by amendment of its
Articles of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or
performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Warrant
and in the taking of all such action as may reasonably be requested by
the holder of any Warrant in order to protect the exercise privilege
of the holders of the Warrant against dilution or other impairment,
consistent with the tenor and purpose of this Warrant.
(b) Issuance of Warrant Securities. If the issuance of any Shares required
to be reserved for purposes of exercise of this Warrant is required to
be registered with or approved by any federal governmental authority
under any federal or state law (other than any registration under the
Securities Act or state securities laws), before such shares may be
issued upon exercise of this Warrant, the Company will, at its
expense, use its best efforts to cause such shares to be so registered
or approved, at such time, so that such shares may be issued in
accordance with the terms hereof.
13. RIGHTS AS SHAREHOLDER. Prior to exercise of this Warrant, the Holder shall
not be entitled to any rights as a shareholder of the Company with respect
to the Shares, including (without limitation) the right to vote such
Shares, receive dividends or other distributions thereon, or be notified of
shareholder meetings, and the Holder shall not be entitled to any notice or
other communication concerning the business or affairs of the Company.
However, in the event of any taking by the Company of a record of the
holders of any class of securities for the purpose of determining the
holders thereof who are entitled to receive any dividend (other than a cash
dividend) or other distribution, any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities
or property, or to receive any other right, the Company shall mail to each
Holder of this Warrant, at least thirty (30) days prior to the date
specified therein, a notice specifying the date on which any such record is
to be taken for the purpose of such dividend, distribution or right, and
the amount and character of such dividend, distribution or right.
14. RESTRICTED SECURITIES. The Holder understands that this Warrant and the
Shares purchasable hereunder constitute "restricted securities" under the
federal securities laws inasmuch as they are, or will be, acquired from the
Company in transactions not involving a public offering and accordingly may
not, under such laws and applicable regulations, be resold or transferred
without registration under the Securities Act of 1933, as amended (the
"1933 Act") or an applicable exemption from such registration. In this
connection, the Holder acknowledges that Rule 144 of the SEC is not now,
and may not in the future be, available for resale of the Warrant and the
Shares purchasable hereunder. The Holder further acknowledges that a
restrictive legend shall be placed on any Shares issued to the Holder upon
exercise of this Warrant.
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15. CERTIFICATION OF INVESTMENT PURPOSE. Unless a current registration
statement under the 1933 Act shall be in effect with respect to the
securities to be issued upon exercise of this Warrant, the Holder covenants
and agrees that, at the time of exercise hereof, it will deliver to the
Company a written certification executed by the Holder that the securities
acquired by him upon exercise hereof are for the account of such Holder and
acquired for investment purposes only and that such securities are not
acquired with a view to, or for sale in connection with, any distribution
thereof.
16. TRANSFERABILITY.
(a) GENERAL. This Warrant shall be transferable only on the books of the
Company maintained at its principal office in Dallas, Texas or
wherever its principal office may then be located, upon delivery
thereof duly endorsed by the Holder or by its duly authorized attorney
or representative, accompanied by proper evidence of succession,
assignment or authority to transfer. Upon any registration of
transfer, the Company shall execute and deliver new Warrants to the
person entitled thereto.
(b) LIMITATIONS ON TRANSFER. This Warrant shall not be sold, transferred,
assigned or hypothecated by the Holder except to (i) one or more
persons, each of whom on the date of transfer is an shareholder,
director or officer of the Holder; (ii) a general partnership or
general partnerships, the general partners of which are the Holder and
one or more persons, each of whom on the date of transfer is an
officer of the Holder; (iii) a successor to the Holder in any merger
or consolidation; (iv) a purchaser of all or substantially all of the
Holder's assets; or (v) any person receiving this Warrant from one or
more of the persons listed in this Section 16(b) at such person's or
persons' death pursuant to will, trust or the laws of intestate
succession. This Warrant may be divided or combined, upon request to
the Company by the Holder, into a certificate or certificates
representing the right to purchase the same aggregate number of
Shares.
17. MISCELLANEOUS.
(a) CONSTRUCTION. Unless the context indicates otherwise, the term
"Holder" shall include any transferee or transferees of this Warrant
pursuant to Section 16(b), and the term "Warrant" shall include any
and all warrants outstanding pursuant to this Agreement, including
those evidenced by a certificate or certificates issued upon division,
exchange, substitution or transfer pursuant to Section 16(b).
(b) RESTRICTIONS. By receipt of this Warrant, the Holder makes the same
representations with respect to the acquisition of this Warrant as the
Holder is required to make upon the exercise of this Warrant and
acquisition of the Shares purchasable hereunder as set forth in the
Form of Investment Letter attached as Exhibit A to the Notice of
Exercise attached hereto.
(c) NOTICES. Unless otherwise provided, any notice required or permitted
under this Warrant shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified
or three (3) days following deposit with the United States Post
Office, by registered or certified mail, postage prepaid and addressed
to the party to be notified (or one (1) day following timely deposit
with a reputable overnight courier with next day delivery
instructions), or upon confirmation of receipt by the sender of any
notice by facsimile transmission, at the address indicated below or at
such other address as such party may designate by ten (10) days'
advance written notice to the other parties.
To Holder: Broyd, Inc.
000000 Xxxxxxxxx Xxxxxxx
Xxxxx Xxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxx
and to Xxxxx Xxxxxxx & Xxxx LLP
3400 JPMorgan Chase Tower
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
To Company: Availent Financial, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: President
(d) GOVERNING LAW. This Warrant shall be governed by and construed under
the laws of the state of Texas as applied to agreements among Texas residents
entered into and to be performed entirely within Texas.
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(e) ENTIRE AGREEMENT. This Warrant, the exhibits and schedules hereto, and
the documents referred to herein, constitute the entire agreement and
understanding of the parties hereto with respect to the subject matter
hereof, and supersede all prior and contemporaneous agreements and
understandings, whether oral or written, between the parties hereto
with respect to the subject matter hereof.
(f) BINDING EFFECT. This Warrant and the various rights and obligations
arising hereunder shall inure to the benefit of and be binding upon
the Company and its successors and assigns, and Xxxxxx and its
successors and assigns.
(g) WAIVER; CONSENT. This Warrant may not be changed, amended, terminated,
augmented, rescinded or discharged (other than by performance), in
whole or in part, except by a writing executed by the parties hereto,
and no waiver of any of the provisions or conditions of this Warrant
or any of the rights of a party hereto shall be effective or binding
unless such waiver shall be in writing and signed by the party claimed
to have given or consented thereto.
(h) SEVERABILITY. If one or more provisions of this Warrant are held to be
unenforceable under applicable law, such provision shall be excluded
from this Warrant and the balance of the Warrant shall be interpreted
as if such provision were so excluded and the balance shall be
enforceable in accordance with its terms.
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[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the
31st day of December, 2003.
Availent Financial, Inc.
By: /s/ Xxxxxxx X. XxXxxxxx
----------------------------------
Xxxxxxx X. XxXxxxxx, President
BROYD, Inc.
By: /s/ Xxxxxx X. Xxxx
----------------------------------
President
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NOTICE OF EXERCISE
To: AVAILENT FINANCIAL, INC.
The undersigned hereby elects to purchase _____________ shares of common
stock ("Stock") of Availent Financial, Inc., a Delaware corporation (the
"Company"), pursuant to the terms of the attached Warrant, and tenders herewith
payment of the purchase price pursuant to the terms of the Warrant.
Attached as Exhibit A is an investment representation letter addressed to
the Company and executed by the undersigned as required by Section 15 of the
Warrant.
Please issue certificates representing the shares of Stock purchased
hereunder in the names and in the denominations indicated on Exhibit A attached
hereto.
Please issue a new Warrant for the unexercised portion of the attached
Warrant, if any, in the name of the undersigned.
Dated:
Name: _________________________
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EXHIBIT A
To: AVAILENT FINANCIAL, INC.
In connection with the purchase by the undersigned of ___________ shares of
the Common Stock (the "Stock") of Availent Financial, Inc., a Delaware
corporation (the "Company"), upon exercise of that certain Warrant dated as of
December 31, 2003, the undersigned hereby represents and warrants as follows:
The shares of Stock to be received by the undersigned upon exercise of the
Warrant are being acquired for its own account, not as a nominee or agent, and
not with a view to resale or distribution of any part thereof, and the
undersigned has no present intention of selling, granting any participation in,
or otherwise distributing the same. The undersigned further represents that it
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participation to such person or to any third
person, with respect to the Stock. The undersigned believes it has received all
the information it considers necessary or appropriate for deciding whether to
purchase the Stock.
The undersigned understands that the shares of Stock are characterized as
"restricted securities" under the federal securities laws inasmuch as they are
being acquired from the Company in transactions not involving a public offering
and that under such laws and applicable regulations such securities may be
resold without registration under the Securities Act of 1933, as amended (the
"Act"), only in certain limited circumstances. In this connection, the
undersigned represents that it is familiar with SEC Rule 144, as presently in
effect, and understands the resale limitations imposed thereby and by the Act.
Without in any way limiting the representations set forth above, the
undersigned agrees not to make any disposition of all or any portion of the
Stock unless and until there is then in effect a registration statement under
the Act covering such proposed disposition and such disposition is made in
accordance with such registration statement, or if requested and at the
Company's sole cost and expense, the undersigned shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition is exempt from the registration and prospectus delivery
requirements under the Act. The Company will not require an opinion of counsel
for sales made pursuant to Rule 144 except in unusual circumstances.
The undersigned understands the instruments evidencing the Stock may bear
the following legend: "THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS
THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR THE COMPANY
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH SALE OR
TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
SUCH ACT."
Dated: _________________ Name: ____________________________
54
