THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW. THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE...
Exhibit
4.36
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THE
SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED,
OR ANY APPLICABLE STATE SECURITIES LAW. THESE SECURITIES MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN
EXEMPTION THEREFROM UNDER SAID ACT. ADDITIONALLY, THE TRANSFER
OF THESE SECURITIES IS SUBJECT TO THE CONDITIONS SPECIFIED IN THAT
CERTAIN
BRIDGE LOAN AGREEMENT ATTACHED HERETO (INDIVIDUALLY AND COLLECTIVELY
REFERRED TO HEREIN AS THE “NOTE”), EXECUTED BY BAYWOOD INTERNATIONAL,
INC., A NEVADA CORPORATION (THE “COMPANY”), AS MAKER, IN FAVOR OF THE
LENDER (AS THE SAME MAY BE AMENDED AND RESTATED FROM TIME TO
TIME). NO TRANSFER OF THESE SECURITIES WILL BE VALID OR
EFFECTIVE UNTIL THE CONDITIONS OF THE NOTE AND THE TERMS OF
THIS WARRANT HAVE BEEN FULFILLED. COPIES OF THE NOTE MAY BE OBTAINED
AT NO
COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE
TO THE SECRETARY OF THE
COMPANY.
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BAYWOOD
INTERNATIONAL, INC.
COMMON
STOCK PURCHASE WARRANT
| No. W - 027 |
Issuance
Date: May 18, 2004
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1.
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Warrant
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1.1 Grant
of Warrant. Baywood International, Inc., a Nevada corporation
(the “Company”), hereby certifies that, for good and valuable consideration, the
receipt of which is hereby acknowledged, the purchaser of this Warrant, X.
X.
Xxxxx, Inc. (“Holder”), is entitled, subject to the terms set forth below and
the terms and conditions of the Note attached hereto executed by the Company
in
favor of the Holder, to purchase at the Exercise Price (as defined in Section
1.2), from the Company at any time or from time to time during the Exercise
Period (as defined in Section 9), One Million Seven Hundred Twenty-Five Thousand
(1,725,000) unregistered shares of the Company’s fully paid and non-assessable
common stock, par value $0.001 per share (the “Common Stock”). Holder
acknowledges that the number of common shares described in the preceding
sentence is the total of all common shares that the Holder is entitled to
acquire under the Note attached hereto.
1.2 Exercise
Price. Holder shall pay a per share purchase price of $0.04 for
each share of the Company’s Common Stock purchased under this Warrant (such
price per share is referred to herein as the “Exercise Price”).
1.3 Adjustments
for Issuance of Common Stock and Amount of Outstanding Common
Stock. If there shall occur any stock split, stock dividend,
reverse stock split, or other subdivision of the Company’s Common Stock (“Stock
Event”), for which the Company receives no new value, then the number of shares
of Common Stock to be received by the Holder of this Warrant shall be
appropriately adjusted (upward or downward) so that the proportion of (a) the
number of shares issuable hereunder, plus the number of shares of Warrant Stock
(as defined below) held by the Holder of this Warrant, to (b) the total number
of shares of the Company (on a fully diluted basis) prior to such Stock Event
is
equal to the proportion of (x) the number of shares issuable hereunder, plus
the
number of shares of Warrant Stock held by the Holder of this Warrant after
such
Stock Event to (y) the total number of shares of the Company (on a fully diluted
basis) after such Stock Event. No adjustment to the Exercise Price
shall be made in connection with any adjustment of the number of shares of
Common Stock receivable upon exercise of this Warrant, except that the Exercise
Price shall be proportionally decreased or increased upon the occurrence of
any
stock split, stock dividend, reverse stock split or other subdivision of the
Common Stock so that the aggregate Exercise Price payable if the Warrant was
exercised in full shall be the same both before and after the Stock Event;
provided, however, that in no event will the Exercise Price be less than the
par
value of the Common Stock. The provisions of this Section 1.3 shall
not apply if the Company issues its Common Stock or other securities for new
consideration or if it repurchases its own shares. For purposes of
this Section 1.3, “Warrant Stock” means shares of Common Stock issued to the
Holder upon the partial exercise of this Warrant.
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2.
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Exercise
of Warrant.
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2.1 Exercise. This
Warrant may be exercised, prior to its expiration pursuant to Section 2.3,
by
the Holder hereof at any time or from time to time during the Exercise Period
(as defined in Section 9), by surrender of this Warrant, with the form of
subscription at the end hereof duly executed by such holder, to the Company
at
its principal office, accompanied by payment, by certified or official bank
check payable to the order of the Company or by wire transfer to its account,
in
the amount obtained by multiplying the number of shares of Common Stock for
which this Warrant is then being exercised by the Exercise Price. In
the event the Warrant is not exercised in full, the Company, at its expense,
will forthwith issue and deliver to, or upon the order of, the Holder hereof
a
new Warrant or Warrants of like tenor, in the name of the holder hereof or
as
such Holder (upon payment by such Holder of any applicable transfer taxes)
may
request, having in the aggregate in Section 1.1 thereof the number of shares
of
Common Stock equal (subject to any adjustment provided for herein) to the number
of such shares called for in Section 1.1 of this Warrant minus the number of
such shares (subject to any adjustment provided for herein) for which this
Warrant shall have been exercised. Upon exercise of this Warrant in
accordance with this Section 2.1, the Holder shall be, and shall be deemed
to
be, for all purposes, a holder of record of the number of shares of Common
Stock
for which this Warrant has been exercised, notwithstanding any delay or failure
of the Company to issue stock certificates as provided in Section 3
hereof. Immediately upon exercise, the Holder shall have the right to
vote on all matters on which holders of Common Stock have a right to vote,
shall
be deemed a record holder for the purposes of voting, dividends or any other
distributions, and shall have all other rights of a stockholder of record under
the laws of the State of Nevada. Upon any exercise of this Warrant,
in whole or in part, the Holder shall pay the aggregate Exercise Price with
respect to the shares of Common Stock for which this Warrant is then being
exercised (collectively, the “Exercise Shares”) by payment of cash in the form
referred to in the first sentence of this Section 2.1.
2
2.2 Class
of Stock Receivable Upon Exercise. If at the time of exercise the
Company has more than one class of Common Stock outstanding, the shares of
Common Stock receivable upon exercise of this Warrant shall be the shares of
Common Stock designated herein upon such exercise by the Holder. If
at any time the Common Stock to which this Warrant is applicable is converted
into any other class of stock (“Other Securities”), this Warrant shall continue
in force and effect and shall be applicable with respect to such Other
Securities.
2.3 Termination. This
Warrant shall terminate upon the earlier to occur of (a) the exercise in full,
or (b) at 5:00 p.m. (Phoenix Time) on May 18, 2009.
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3.
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Delivery
of Stock Certificates on
Exercise.
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3.1 Delivery. As
soon as practicable after the exercise of this Warrant in full or in part,
and
in any event within seven business days thereafter, the Company, at its expense
(including the payment by it of any applicable issue taxes), will cause to
be
issued in the name of and delivered to the Holder hereof, or as such Holder
(upon payment by such holder of any applicable transfer taxes) may direct,
a
certificate or certificates for the number of fully paid and non-assessable
shares of Common Stock (or Other Securities (as defined in Section 2.2)) to
which such Holder shall be entitled on such exercise, together with any other
stock or other securities and property (including cash, where applicable) to
which such holder is entitled upon such exercise.
3.2 Legend. The
Company may cause the following legend to be set forth on each certificate
representing shares of Common Stock acquired under this Warrant or any other
security issued or issuable upon the exercise of this Warrant, unless counsel
for the Company is of the opinion as to any such certificate that such legend
is
unnecessary:
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933 (THE “ACT”) OR APPLICABLE STATE LAW AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS REGISTERED
UNDER THE ACT AND STATE LAW, OR, UNLESS IN THE OPINION OF COUNSEL, IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THE SECURITIES, SUCH OFFER,
SALE, OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM
REGISTRATION.
3
3.3 Fractional
Shares. In the event that the exercise of this Warrant, in whole
or in part, results in the issuance of any fractional share of Common Stock,
then in such event the Holder shall be entitled to cash equal to the fair market
value of such fractional share as determined in good faith by the Company’s
Board of Directors.
4. Continuation
of Terms. Upon any reorganization, consolidation, merger or
transfer (and any dissolution following any transfer) of the Company, this
Warrant shall continue in full force and effect and the terms hereof shall
be
applicable to the shares of stock and other securities and property receivable
on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger, or the effective date of dissolution following any
such
transfer, as the case may be, and shall be binding upon the issuer of any stock
or other securities, including, in the case of any such transfer, the person
acquiring all or substantially all of the properties or assets of the Company,
whether or not such person shall have expressly assumed the terms of this
Warrant.
5. No
Impairment; No Preemptive Rights. The Company will not, by
amendment of its Articles of Incorporation (or similar documents) 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 of the Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the holder of the Warrant. Nothing in this Warrant
shall grant (or be construed to grant) Holder any preemptive or other
preferential rights with respect to the issuance of any class of the Company
debt or equity securities.
6. Notices. In
the event of:
(a) any
capital reorganization of the Company, any reclassification or recapitalization
of the capital stock of the Company or any transfer of all or substantially
all
the assets of the Company to or any consolidation or merger of the Company
with
or into any other Person; or
(b) any
voluntary or involuntary dissolution, liquidation or winding-up of the
Company;
then,
and
in each such event, the Company will mail or cause to be mailed to the holder
of
this Warrant a notice specifying the date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up is anticipated to take place, and the
time, if any is to be fixed, as of which the holders of record of Common Stock
(or Other Securities) shall be entitled to exchange their shares of Common
Stock
(or Other Securities) for securities or other property deliverable on such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up. Such notice shall be
mailed at least 15 days prior to the date specified in such notice on which
any
such record or other action is to be taken.
4
7.
Reservation of Stock Issuable on Exercise of Warrant. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of this Warrant, a number of shares of Common Stock
equal to the total number of shares of Common Stock from time to time issuable
upon exercise of this Warrant, and, from time to time, will take all steps
necessary to amend its Articles of Incorporation to provide sufficient reserves
of shares of Common Stock issuable upon exercise of this Warrant, which is
not
reflected on its corporate register and which is not in compliance with federal
and state securities laws.
8.
Registered Form. This Warrant shall be in
registered form only in accordance with the Note. The Company shall
treat the person reflected on its corporate register as the Holder of the
Warrant. The Company shall not be obligated to recognize any transfer
of this Warrant which is not reflected in its corporate register and which
is
not in compliance with federal and state securities laws.
9.
Definitions. As used herein the following terms,
unless the context otherwise requires, have the following respective
meanings:
(a) The
term “Common Stock” includes (i) the Company’s Common Stock, par value $0.001
per share (the “Common Stock”), (ii) any other capital stock of any class or
classes (however designated) of the Company, the holders of which shall have
the
right, without limitation as to amount, either to all or to a share of the
balance of current dividends and liquidating dividends after the payment of
dividends and distributions on any shares entitled to preference, and (iii)
any
other securities into which or for which any of the securities described in
clauses (i) or (ii) above have been converted or exchanged pursuant to a plan
of
recapitalization, reorganization, merger, sale of assets or
otherwise.
(b) The
term “Exercise Period” shall mean the period beginning on the date of issuance
and ending at 5:00 p.m. on May 18, 2009.
(c) The
term “Warrant Stock” means shares of Common Stock issued to the holder upon the
exercise of this Warrant.
(d) The
term “Other Securities” shall have the meaning stated in Section
2.2.
10. Warrant
Agent. The Company may, by written notice to the holder of this
Warrant, appoint an agent having an office in Phoenix, Arizona for the purpose
of issuing Common Stock on the exercise of this Warrant pursuant to Section
2
hereof, or any of the foregoing, and thereafter any such issuance, exchange
or
replacement, as the case may be, shall be made at such office by such
agent.
11. Promissory
Note. This Warrant is issued pursuant to the terms and conditions
of the aforementioned Note and shall be subject to all terms and conditions
thereof pertaining to the Company’s issuance of Warrants.
5
12. Accredited
Investor. The Holder of this Warrant is an “Accredited Investor”
as such term is defined in the Securities Act of 1933 and any regulation
issued
thereunder. By accepting this Warrant, the Holder represents and
warrants to the Company that he is an Accredited Investor, as defined
above.
13. Remedies. The
Company stipulates that the remedies at law of the holder of this Warrant in
the
event of any default or threatened default by the Company in the performance
of
or compliance with any of the terms of this Warrant are not and will not be
adequate, and that such terms may be specifically enforced by a decree for
the
specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise.
14. Benefit. This
Warrant shall be binding upon, and inure solely to the benefit of the Company
and Holder and no other person shall acquire or have any right under or by
virtue of this Warrant.
15. Registration
Rights. Subject to the limitations of this Section, the Company
agrees to register shares of Warrant Stock, upon the request of Holder, if
the
Company files a registration statement under the Securities Act of 1933 (“the
Act”), which relates to a current offering of the Company’s Common Stock (except
a registration statement filed in connection with an offering of the Company’s
equity securities to its employees pursuant to any employee benefit or stock
option plan or any dividend reinvestment plan maintained or pursuant to a merger
agreement or agreement to acquire the assets of another entity or similar
transaction) so as to permit the public sale of the Warrant Stock by the Holder
in compliance with the Act. The Company shall give written notice
(the “Registration Notice”) to Holder of its intention to file a registration
statement under the Act relating to an offering of its Common Stock not less
than sixty (60) days prior to the filing of such registration statement with
the
Securities and Exchange Commission (“SEC”). The Holder may request
that the Company include all or a portion of his Warrant Stock in such
registration statement, only if such request is made not later than thirty
(30)
days prior to the date specified in the Registration Notice as the date on
which
the Company intends to file its registration statement with the
SEC. Neither the Company’s delivery of the Registration Notice nor
the delivery of a request by Holder for registration of Warrant Stock shall
obligate the Company to file a registration statement and, notwithstanding
the
filing of a registration statement, the Company may at any time prior to the
effective date determine not to offer the securities described in the
registration statement, and may withdraw the registration statement without
liability to any Holder of Warrant Stock. In that event, the Company
shall pay all expenses of the registration statement incurred through the date
it is withdrawn. The Company shall pay the entire cost of any
Registration Statement covering Warrant Stock, including, without limitation,
attorneys’ fees, accounting fees, filing fees and printing costs, but excluding
any underwriter’s discount. The Holder shall be solely responsible
for any underwriter discount on Warrant Stock sold by the Holder. Any
Warrant Stock included in a registration statement filed by the Company shall
be
subject to underwriter cutbacks and any other limitations an underwriter, in
its
discretion, may impose on the inclusion of such Warrant Stock in the
registration statement.
6
16. Notices. All
notices and other communications from the Company to the holder of this Warrant
shall be mailed by first class registered or certified mail, postage prepaid,
or
sent by overnight courier (or sent in the form of a telecopy) at the following
addresses:
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If
to Company:
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Baywood
International, Inc.
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00000
Xxxxx 00xx Xxxxx, Xxxxx 0
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Xxxxxxxxxx,
Xxxxxxx 00000
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Attn: Xx.
Xxxx Xxxxxxxxxx, President and C.E.O.
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Facsimile: (000)000-0000
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If
to Holder:
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X.
X. Xxxxx, Inc.
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Attn: Mr.
O. Xxx Xxxxx, III
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000
Xxxxxx Xxxx Xxxx
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Xxxxxxx
Xxxxx, XX 00000
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17. Severability. In
case any provision of this Warrant shall be invalid, illegal or unenforceable,
or partially invalid, illegal or unenforceable, the provision shall be enforced
to the extent, if any, that it may legally be enforced and the validity,
legality and enforceability of the remaining provisions shall not in any way
be
affected or impaired thereby.
18. Integration. This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by a statement in writing signed by the party against which enforcement
of
such change, waiver, discharge or termination is sought. The parties
waive any common law right to orally modify this Warrant.
19. Choice
of Law. This Warrant shall be governed by and construed in
accordance with the domestic substantive laws (and not the conflict of law
rules) of the State of Nevada.
20. Headings. The
headings in this Warrant are for purposes of reference only, and shall not
limit
or otherwise affect any of the terms hereof.
IN
WITNESS WHEREOF, the Company has caused this Common Stock Purchase Warrant
to be
executed by its duly authorized officer and attested by its
Secretary.
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By:
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Xxxx
Xxxxxxxxxx
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President
and Chief Executive Officer
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| Attest: | |||
| , Secretary |
7
