NEITHER THIS WARRANT, NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF, HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES"), OR ANY APPLICABLE STATE SECURITIES LAW. SUCH SECURITIES MAY NOT
BE SOLD OR OTHERWISE TRANSFERRED UNLESS (i) A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME
EFFECTIVE WITH REGARD THERETO OR (ii) IN THE OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO THE COMPANY, REGISTRATION UNDER THE SECURITIES ACT AND SUCH
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH A PROPOSED
SALE OR TRANSFER.
COMMON STOCK
PURCHASE WARRANT
For the Purchase of Shares of
Common Stock of
XXXXX ENGINES & COMPETITION COMPONENTS, INC.
(Par Value $0.01 Per Share)
(Incorporated under the Laws of the State of Nevada)
VOID AFTER 5:00 P.M. PST ON August 27, 2002
Date of Original Issuance: August 27, 1997
This is to certify that, for value received, DOMINION INCOME MANAGEMENT
CO. or assigns (the "Warrantholder"), is entitled, subject to the terms and
conditions hereinafter set forth, at any time after August 27, 1997 and on or
before 5:00 P.M., Pacific Standard Time, on August 27, 2002, but not thereafter,
to purchase 10,000 shares of common stock, par value $0.01 per share (the
"Common Stock"), of XXXXX ENGINES & COMPETITION COMPONENTS, INC. (the "Company")
for the Warrant Price (as defined below), and to receive a certificate or
certificates for the shares of Common Stock so purchased.
1. Terms And Exercise Of Warrants.
(a) Exercise Period. Subject to the terms of this Warrant, the
Warrantholder shall have the right, at any time during the period (the "Exercise
Period") commencing on August 27, 1997 and ending at 5:00 P.M., Pacific Standard
Time, on August 27, 2002 (the "Termination Date"), or if such date is a day on
which banking institutions are authorized by law to close, then on the next
succeeding day which shall not be such a day, to purchase from the Company up to
the number of fully paid and nonassessable shares of Common Stock which the
Warrantholder may at the time be entitled to purchase pursuant to this Warrant.
Such shares of Common Stock and any other securities that the
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Company may be required by the operation of Section 3 to issue upon the exercise
hereof are referred to hereinafter as the "Warrant Shares."
(b) Method of Exercise. This Warrant shall be exercised by
surrender of this Warrant to the Company at its principal office in Tempe,
Arizona, or at such other address as the Company may designate by notice in
writing to the Warrantholder at the address of the Warrantholder appearing on
the books of the Company or such other address as the Warrantholder may
designate in writing, together with the form of Election to Purchase included as
Exhibit "A" hereto, duly completed and signed, and upon payment to the Company
of the Warrant Price (as defined in Section 2) multiplied by the number of
Warrant Shares being purchased upon such exercise (the "Aggregate Warrant
Price"), together with all taxes applicable upon such exercise. Payment of the
Aggregate Warrant Price shall be made in cash or by certified check or cashier's
check, payable to the order of the Company.
(c) Partial Exercise. This Warrant shall be exercisable, at
the election of the Warrantholder, either in full or from time to time in part,
during the Exercise Period.
(d) Share Issuance Upon Exercise. Upon the exercise and
surrender of this Warrant certificate and payment of such Warrant Price, the
Company shall issue and cause to be delivered with all reasonable dispatch to
the Warrantholder, in such name or names as the Warrantholder may designate in
writing, a certificate or certificates for the number of full Warrant Shares so
purchased upon the exercise of the Warrant, together with cash, as provided in
Section 4 hereof, with respect to any fractional Warrant Shares otherwise
issuable upon such surrender and, if applicable, the Company shall issue and
deliver a new Warrant to the Warrantholder for the number of shares not so
exercised. Such certificate or certificates shall be deemed to have been issued
and any person so designated to be named therein shall be deemed to have become
a holder of such Warrant Shares as of the close of business on the date of the
surrender of the Warrant and payment of the Warrant Price, notwithstanding that
the certificates representing such Warrant Shares shall not actually have been
delivered or that the stock transfer books of the Company shall then be closed.
2. Warrant Price.
The price per share at which Warrant Shares shall be purchasable on the
exercise of this Warrant shall be $0.01 per share, subject to adjustment
pursuant to Section 3 hereof (originally and as adjusted, the "Warrant Price").
3. Adjustment Of Warrant Price And Number Of Shares.
The Company agrees to reserve and shall keep reserved for issuance the
number of shares of Common Stock issuable upon exercise of this Warrant. The
number and kind of securities purchasable upon the exercise of this Warrant and
the Warrant Price shall be subject to adjustment from time to time upon the
happening of certain events, as follows:
(a) In case the Company shall (1) pay a dividend or make a
distribution in shares of its Common Stock, (2) subdivide its outstanding Common
Stock into a greater number of shares, (3) combine its outstanding Common Stock
into a smaller number of shares, or (4) issue by reclassification of its Common
Stock any shares of capital stock of the Company (other than a change in par
value, or from par value to no par value, or from no par value to par value),
the Warrant Price and the number
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of shares of Common Stock or other securities issuable upon exercise of this
Warrant in effect immediately prior thereto shall be adjusted so that the
Warrantholder, by operation of Section 3(d) hereof, shall be entitled to receive
the number of shares which it would have owned or have been entitled to receive
immediately following the happening of any of the events described above, had
this Warrant been exercised immediately prior to the record or effective date
thereof.
An adjustment made pursuant to Sections 3(a)(1)-(4) above shall become
effective immediately after the record date in the case of a dividend or
distribution (provided, however, that such adjustments shall be reversed if such
dividends or distributions are not actually paid) 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
paragraph, the Warrantholder shall become entitled to receive shares of two or
more classes of capital stock of the Company, the Board of Directors (whose
determination shall be conclusive and shall be evidenced by a resolution) shall
determine the allocation of the adjusted Warrant Price between or among the
shares of such classes of capital stock.
(b) In case of any reclassification of the outstanding Common
Stock (other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision, combination or
stock dividend), or in case of any consolidation of the Company with, or merger
of the Company into, another corporation wherein the Company is not the
surviving entity, or in case of any sale of all, or substantially all, of the
property, assets, business and goodwill of the Company, the Company, or such
successor or purchasing corporation, as the case may be, shall provide, by a
written instrument delivered to the Warrantholder, that the Warrantholder shall
thereafter be entitled, upon exercise of this Warrant, to the kind and amount of
shares of stock or other equity securities, or other property or assets that
would have been receivable by such Warrantholder upon such reclassification,
consolidation, merger or sale, if this Warrant had been exercised immediately
prior thereto. Such corporation, which thereafter shall be deemed to be the
"Company" for purposes of this Warrant, shall provide in such written instrument
for adjustments to the Warrant Price that shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section 3.
(c) No adjustment in the number of securities purchasable
hereunder shall be required unless such adjustment would require an increase or
decrease of at least five percent (5%) in the number of securities (calculated
to the nearest full share or unit thereof) then purchasable upon the exercise of
this Warrant; provided, however, that any adjustment which by reason of this
Section 3(c) is not required to be made immediately shall be carried forward and
taken into account in any subsequent adjustment.
(d) Whenever the Warrant Price is adjusted as provided in this
Section 3, the number of shares of Common Stock or other securities issuable
upon exercise of this Warrant shall be adjusted simultaneously, by multiplying
the number of shares previously issuable by a fraction, of which the numerator
shall be the Warrant Price in effect immediately prior to such adjustment, and
of which the denominator shall be the Warrant Price as so adjusted.
(e) For the purpose of this Section 3, the term "Common Stock"
shall mean (i) the class of stock designated as Common Stock of the Company at
August 27, 1997, or (ii) any other class of stock resulting from successive
changes or reclassifications of such Common Stock consisting solely of changes
in par value, or from par value to no par value, or from no par value to par
value. In the event that at any time, as a result of an adjustment made pursuant
to this Section 3, the Warrantholder shall become entitled to purchase any
shares of the Company's capital stock other than Common Stock,
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thereafter the number of such other shares so purchasable upon the exercise of
this Warrant and the Warrant Price of such shares 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 contained in this Section 3.
(f) Whenever the number of shares of Common Stock and/or other
securities purchasable upon the exercise of this Warrant or the Warrant Price is
adjusted as herein provided, the Company shall cause to be promptly mailed to
the Warrantholder by first class mail, postage prepaid, notice of such
adjustment and a certificate of the Company's chief financial officer setting
forth the number of shares of Common Stock and/or other securities purchasable
upon the exercise of this Warrant, the Warrant Price after such adjustment, a
brief statement of the facts requiring such adjustment, and the computation by
which such adjustment was made.
(g) Irrespective of any adjustments in the Warrant Price or
the number or kind of securities purchasable upon the exercise of this Warrant,
the Warrant certificate or certificates theretofore or thereafter issued may
continue to express the same price or number or kind of securities stated in
this Warrant initially issuable hereunder.
4. Fractional Interest.
The Company shall not be required to issue fractional shares upon
exercise of this Warrant but shall pay an amount in cash equal to the closing
price of the Company's Common Stock on a national securities exchange or the
Nasdaq National Market on the day preceding the date of the surrender of the
Warrant pursuant to Section 1(b) hereof, or if there is no public market, cash
equal to the then fair market value of the shares as reasonably determined by
the Board of Directors of the Company, in its sole discretion, multiplied by
such fraction.
5. Transfer of Warrant.
Subject to the transfer conditions referred to in the legend endorsed
hereon, this Warrant and all rights hereunder are transferable, in whole or in
part, without charge to the Warrantholder, upon surrender of this Warrant with a
properly executed Assignment (in the form of Exhibit "B" hereto) at the
principal office of the Company in Tempe, Arizona.
6. No Rights As Shareholder; Notices To Warrantholder.
Nothing contained in this Warrant shall be construed as conferring upon
the Warrantholder or its transferee any rights as a shareholder of the Company,
either at law or in equity, including the right to vote, receive dividends,
consent or receive notices as a shareholder with respect to any meeting of
shareholders for the election of directors of the Company or for any other
matter.
7. Notices.
Any notice given pursuant to this Warrant by the Company or by the
Warrantholder shall be in writing and shall be deemed to have been duly given
upon (a) transmitter's confirmation of the receipt of a facsimile transmission,
(b) confirmed delivery by a standard overnight carrier, or (c) the expiration
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of three business days after the day when mailed by United States Postal Service
by certified or registered mail, return receipt requested, postage prepaid at
the following addresses:
If to the Company:
Xxxxx Engines & Competition Components, Inc.
0000 X. Xxxxxx Xxxx
Xxxxx, XX 00000
If to the Warrantholder, then to the address of the Warrantholder in
the Company's books and records.
Each party hereto may, from time to time, change the address to which
notices to it are to be transmitted, delivered or mailed hereunder by notice in
accordance herewith to the other party.
8. General Provisions.
(a) Successors. All covenants and provisions of this Warrant
shall bind and inure to the benefit of the respective executors, administrators,
successors and assigns of the parties hereto.
(b) Choice Of Law. This Warrant and the rights of the parties
hereunder shall be governed by and construed in accordance with the laws of the
State of Arizona, including all matters of construction, validity, performance,
and enforcement, and without giving effect to the principles of conflict of
laws.
(c) Entire Agreement. Except as provided herein, this Warrant,
including exhibits, contains the entire agreement of the parties, and supersedes
all existing negotiations, representations or agreements and all other oral,
written, or other communications between them concerning the subject matter of
this Warrant.
(d) Severability. If any provision of this Warrant is
unenforceable, invalid, or violates applicable law, such provision shall be
deemed stricken and shall not affect the enforceability of any other provisions
of this Warrant.
(e) Captions. The captions in this Warrant are inserted only
as a matter of convenience and for reference and shall not be deemed to define,
limit, enlarge, or describe the scope of this Warrant or the relationship of the
parties, and shall not affect this Warrant or the construction of any provisions
herein.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of the date first above written.
XXXXX ENGINES & COMPETITION
COMPONENTS, INC., a Nevada corporation
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Its: President
----------------------------------
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Exhibit A
XXXXX ENGINES & COMPETITION COMPONENTS, INC.
ELECTION TO PURCHASE
Xxxxx Engines & Competition Components, Inc.
0000 X. Xxxxxx Xxxx
Xxxxx, XX 00000
The undersigned hereby irrevocably elects to exercise the
right of purchase set forth in the attached Warrant to purchase thereunder _____
shares of the Common Stock (the "Shares") provided for therein and requests that
the Shares be issued in the name of
Name: _________________________
Address: _________________________
_________________________
Social Security Number or Employer Identification Number: ______________________
Dated: _________________________
Name of Warrantholder or Assignee: _____________________________
(Please Print)
Signature:______________________________________________________
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant.)
Method of payment: _____________________________________________
(Please Print)
_____________________________________________________________
Medallion Signature Guarantee (required if an assignment
of Shares acquired on exercise, or an assignment of Warrants
remaining after exercise, is made upon exercise.)
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Exhibit B
ASSIGNMENT
FOR VALUE RECEIVED, ___________________________________ hereby
sells, assigns and transfers all of the rights of the undersigned under the
attached Warrant with respect to the number of shares of Common Stock covered
thereby set forth below, unto:
Name of Assignee Address No. of Shares
---------------- ------- -------------
and does hereby irrevocably constitute and appoint __________________________,
Attorney, to transfer the attached Warrant on the books of the Company, with
full power of substitution.
Dated: ____________ Signature:__________________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant.)
__________________________________________
(SSN or EIN of Warrantholder)
____________________________________________________________
Medallion Signature Guarantee (required if an assignment
of Shares acquired on exercise, or an assignment of Warrants
remaining after exercise, is made upon exercise.)
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