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EXHIBIT 10.23
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE
OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
WARRANTS TO PURCHASE __________ SHARES OF COMMON STOCK
SIMULATIONS PLUS, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF CALIFORNIA
Void after June 30, 2002
THE WARRANTS evidenced by this certificate have been issued for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
THIS CERTIFICATE evidences the right of ______________________________
("Holder") to purchase, for the Warrant Price (as defined below), __________
Shares of Common Stock (the "Shares"), of SIMULATIONS PLUS, INC., a California
corporation (the "Company"), subject to the terms and conditions hereinafter set
forth.
1. Term of Warrants. The Warrants may be exercised only during
the five-year period (the "Warrant Term") commencing on the earlier of (i) the
effective date of the registration statement filed by the Company with the U.S.
Securities and Exchange Commission ("Commission") under the Securities Act of
1933, as amended (the "Act"), in connection with the initial public offering of
securities of the Company )the ("IPO"), or (ii) June 30, 1997, and ending five
years after the commencement of such Term, and may be exercised only in
accordance with the terms and conditions hereinafter set forth.
2. Exercise of Warrants.
(a) Right to Exercise. The Warrants shall vest and become
exercisable upon commencement of the Warrant Term and may be exercised in whole
or in part at any time or from time to time during the Warrant Term.
(b) Method of Exercise; Payment. The Warrants may be
exercised by Holder, in whole or in part, by the surrender of this Certificate,
properly endorsed, at the principal office of the Company, and by payment to the
Company by certified or cashier's check of the then applicable Warrant Price.
Alternatively, exercise of the Warrants may be effected by "cashless exercise"
through a registered broker-dealer or escrow agent on terms
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acceptable to Maker pursuant to which the Warrant Price is paid from the
proceeds of the sale of the underlying Shares by such broker-dealer or escrow
agent on behalf of the Holder to the Company. Each Warrant shall be exercisable
for one Share of common Stock. In the event of any exercise of the Warrants,
certificates for Shares so purchased shall be delivered to Holder within a
reasonable time after the Warrants shall have been so exercised, and unless the
Warrants have expired, a new certificate representing the right to purchase the
number of Shares, if any, with respect to which this Certificate shall not then
have been exercised shall also be issued to Holder within such time. All such
new certificates shall be dated the date hereof and shall be identical with this
Certificate except as to the number of Shares issuable pursuant thereto. The
Company shall pay all documentary, stamp or other transactional taxes (other
than transfer taxes) attributable to the issuance or delivery of shares of
Common Stock of the Company upon exercise of the Warrants.
(c) Restrictions on Exercise. The Warrants may not be
exercised if the issuance of the Shares upon such exercise would constitute a
violation of any applicable federal or state securities laws or other laws or
regulations. As a condition to the exercise of the Warrants, the Company may
require Holder to make such representations and warranties to the Company as may
be required by applicable law or regulation.
3. Stock Fully Paid; Reservations of Shares; The Company
covenants and agrees that all Shares will, upon issuance and payment in
accordance herewith, be fully paid, validly issued and nonassessable. The
Company further covenants and agrees that during the Warrant Term the Company
will at all times have authorized and reserved for the purpose of the issue upon
exercise of the Warrrants at least the maximum number of shares of the Company's
Common Stock as are issuable upon the exercise of the Warrants.
4. Adjustment of Purchase Price and Number of Shares: The number
and kind of securities purchasable upon the exercise of the Warrants and the
Warrant Price shall be subject to adjustment from time to time upon the
happening of certain events, as follows:
(a) Consolidation, Merger or Reclassification: If the
Company at any time while the Warrants remain outstanding and unexpired shall
consolidate with or merge into any other corporation, or sell all or
substantially all of its assets to another corporation, or reclassify or in any
manner change the securities then purchasable upon the exercise of the Warrants
(any of which shall constitute a "Reorganization"), then lawful and adequate
provision shall be made whereby this Certificate shall thereafter evidence the
right to purchase such number and kind of securities and other property as would
have been issuable or distributable on account of such Reorganization upon or
with
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respect to the securities which were purchasable under the Warrants immediately
prior to the Reorganization. The Company shall not effect any such
Reorganization unless prior to or simultaneously with the consummation thereof
the successor corporation (if other than the Company) resulting from such
Reorganization shall assume by written instrument executed and mailed or
delivered to Holder, at the last address of Holder appearing on the books of the
Company, the obligation to deliver to Holder such shares of stock, securities or
assets as, in accordance with the foregoing provisions, Holder may be entitled
to purchase. Notwithstanding anything in this Section 4(a) to the contrary, the
prior two sentences shall be inoperative and of no force and effect and those
Warrants which are unexercised shall expire on the completion of such
Reorganization if upon the completion of any such Reorganization the
shareholders of the Company immediately prior to such event do not own at least
50% of the equity interest of the entity resulting form such Reorganization, the
notice required by Section 4(e) hereof has been duly given and the Warrants were
fully exercisable at the time such notice was provided.
(b) Subdivision or Combination of Shares. If the Company
at any time while the Warrant remains outstanding and unexpired shall subdivide
or combine its Common Stock, the Warrant Price shall be adjusted to that price
determined by multiplying the Warrant Price in effect immediately prior to such
subdivision or combination by a fraction (i) the numerator of which shall be the
total number of shares of Common Stock outstanding immediately prior to such
subdivision or combination and (ii) the denominator of which shall be the total
number of shares of Common Stock outstanding immediately after such subdivision
or combination.
(c) Certain Dividends and Distributions. If the Company
at any time while the Warrants are outstanding and unexpired shall take a record
of the holders of its Common Stock for the purpose of:
(i) Stock Dividends. Entitling them to receive a
dividend payable in, or other distribution without consideration of, Common
Stock, then the Warrant Price shall be adjusted to that price determined by
multiplying the Warrant Price in effect immediately prior to each dividend or
distribution by a fraction (A) the numerator of which shall be the total number
of shares of Common Stock outstanding immediately prior to such dividend or
distribution, and (B) the denominator of which shall be the total number of
shares of Common Stock outstanding immediately after such dividend or
distribution; or
(ii) Distribution of Assets, Securities, etc.
Making any distributions without consideration with respect to its Common Stock
(other than a cash dividend) payable otherwise than in its Common Stock, Holder
shall, upon the exercise of the Warrants, be entitled to receive, in addition to
the number of shares
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receivable thereupon, and without payment of any additional consideration
therefor, such assets or securities as would have been payable to him as owner
of that number of Shares receivable thereupon, and without payment of any
additional consideration therefor, such assets or securities as would have been
payable to him as owner of that number of Shares receivable by exercise of the
Warrants and had he been the holder of record of such Shares on the record date
for such distribution, and an appropriate provision therefore shall be made a
part of any such distribution.
(d) Adjustment of Number of Shares. Upon each adjustment
in the Warrant Price pursuant to Subsections (b) or (c)(1) of this Section 4,
the number of Shares purchasable hereunder shall be adjusted to that number
determined by multiplying the number of such Shares, as the case may be,
purchasable upon the exercise of the Warrants immediately prior to such
adjustment by a fraction, the numerator of which shall be the Warrant Price
immediately prior to such adjustment and the denominator of which shall be the
Warrant Price immediately following such adjustment.
(e) Notice. In case at any time:
(i) The Company shall pay any dividend payable
in stock upon its Common Stock or make any distribution, excluding a cash
dividend, to the holders of its Common Stock;
(ii) The Company shall offer for subscription pro
rata to the holders of its Common Stock any additional shares of stock of any
class or other rights;
(iii) There shall be any reclassification of the
Common Stock of the Company, or consolidation or merger of the Company with, or
sale of all or substantially all of its assets to, another corporation; or
(iv) There shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to Holder at
least 10 days' prior written notice (or, in the event of notice pursuant to
Section 4(e)(iii), at least 30 days' prior written notice) of the date on which
the books of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights or for determining rights to vote
in respect to any such reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up. Such notice in accordance with the
foregoing clause shall also specify, in the case of any such dividend,
distribution or subscription rights, the date on which the holders of Common
Stock shall be entitled thereto, and such notice in accordance with the
foregoing clause shall also specify the date on which the holders of Common
Stock shall be
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entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, as the case may be. Each such written
notice shall be given by first-class mail, postage prepaid, addressed to Holder
at the address of Holder as shown on the books of the Company.
(f) No Change in Certificate. The form of this
Certificate need not be changed because of any adjustment in the Warrant Price
or in the number of Shares purchasable on its exercise. The Warrant Price or the
number of Shares shall be considered to have been so changed as of the close of
business on the date of adjustment.
5. Fractional Shares. No fractional Shares will be issued in
connection with any subscription hereunder but, in lieu of such fractional
Shares, the Company shall make a cash payment therefor upon the basis of the
fair market value of the Shares.
6. Restrictions on Transfer. The Warrants are restricted from
sale, transfer, assignment or hypothecation by operation of law. The Warrants
have not been registered under the Act or any applicable state securities laws,
and may not be offered for sale, sold, transferred, pledged or hypothecated
without an effective registration statement under the Act and under any
applicable state securities law, or an opinion of counsel, satisfactory to the
Company, that an exemption from such registration is available. The Holder
understands that because the Warrants are not registered, the Holder must hold
the Warrants indefinitely unless they are registered under the Act and any
applicable state securities laws or must obtain exemptions from registration.
The Holder represents and warrants that the holder is purchasing the Warrants
for his own account for investment and not with the view to distribution,
assignment, resale or other transfer of the Warrants. Except as specifically
stated herein, no other person has a direct or indirect beneficial interest in
the Warrants.
7. Registration rights.
(a) Registration and Legends. This Warrant and the Shares
issuable upon exercise of this Warrant have not been registered under the
Securities Act of 1933, as amended (the "Act"). Upon exercise, in part or in
whole, of this Warrant, the certificates representing the Shares shall bear the
following legend:
THIS SECURITY HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933 ("ACT") OR THE SECURITIES OR BLUE SKY
LAWS OF ANY STATE AND MAY NOT BE OFFERED AND SOLD UNLESS
REGISTERED AND/OR QUALIFIED PURSUANT TO THE RELEVANT
PROVISIONS OF FEDERAL AND STATE
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SECURITIES OR BLUE SKY LAWS OR AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS APPLICABLE. THEREFORE, NO
SALE OR TRANSFER OF THIS SECURITY SHALL BE MADE, NO ATTEMPTED
SALE OR TRANSFER SHALL BE VALID, AND THE ISSUER SHALL NOT BE
REQUIRED TO GIVE ANY EFFECT TO ANY SUCH TRANSACTION UNLESS (A)
SUCH TRANSACTION SHALL HAVE BEEN DULY REGISTERED UNDER THE ACT
AND QUALIFIED OR APPROVED UNDER APPROPRIATE STATE OR BLUE SKY
LAWS, OR (B) THE ISSUER SHALL HAVE FIRST RECEIVED AN OPINION
OF COUNSEL SATISFACTORY TO IT THAT SUCH REGISTRATION,
QUALIFICATION OR APPROVAL IS NOT REQUIRED.
(b) No Action Letter. The Company agrees that it shall be
satisfied that no post-effective amendment or new registration is required for
the public sale of the Shares if it shall be presented with a letter from the
Staff of the Securities and Exchange Commission (the "Commission") stating in
effect that, based upon stated facts which the Company shall have no reason to
believe are not true in any material respect, the Staff will not recommend any
action to the Commission if such shares are offered and sold without delivery of
a prospectus, and that, therefore, no post-effective amendment to the
Registration Statement under which such Shares are to be registered or new
registration statement is required to be filed.
(c) Demand Registration Rights. The Company has agreed,
upon the demand of a majority-in-interest ("Majority-in- Interest") of holders
of Warrants who acquired their Warrants in the private placement (the "Private
Placement") that the Company made in December 1996 and January 1997, to register
the Shares, to file a new Registration Statement, and to file all necessary
undertakings with the Commission so as to permit such holders, or any assignee
of such holders, the right to sell publicly the Shares issued on exercise of
this Warrant on two occasions at any time within five (5) years from the
effective date of the Company's first Registration Statement as filed in 1997.
In connection with the first request, the Company will bear all expenses
attendant to registering the securities (subject to Section 7(e)(v)), and in
connection with the second request, the holders of the securities will bear all
expenses.
(d) Piggyback Registration Rights. In the event that the
Holder does not exercise his, her or its, as the case may be, right to demand
that the Shares be registered, the Company agrees to include any appropriate
Shares issuable upon exercise of the Warrants in any Registration Statement
filed by the Company at any time within seven (7) years from the effective date
of the Company's first Registration Statement as filed in 1997 (except for any
registration on Forms S-4 or S-8 or similar forms).
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(e) Covenants Regarding Registration. In connection with
any registration under Section 7(c) or (d) hereof, the Company covenants and
agrees as follows:
(i) The Company will, within twenty days after
written request from a Majority-in-Interest, take all steps necessary to
effectuate preparation and filing with the Securities and Exchange Commission of
the registration statement as required by and in compliance with the Act.
(ii) The Company shall keep such registration
statement effective for the lesser of (1) one hundred twenty (120) days, or (2)
the period of time in which the holders of such securities have effected the
distribution of their Shares. During such period the Company shall prepare and
file with the SEC such amendments and supplements to such registration statement
and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement.
(iii) The Company shall notify each holder of
Shares covered by such registration statement at any time when a prospectus
relating thereto is required to be delivered under the Act of the happening of
any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing.
(iv) The Company shall furnish to the holders
such numbers of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Act, and such other documents as they
may reasonably request in order to facilitate the disposition of the Shares
owned by them.
(v) The Company shall pay all costs, fees, and
expenses in connection with new registration statements under Section 7(c)
(excluding the costs attendant to a second demand registration) and Section 7(d)
hereof including, but without limitation, the Company's legal and accounting
fees, printing expenses, blue sky fees and expenses, except that the Company
shall not pay for any of the following costs and expenses: (1) underwriting
discounts and commissions allocable to the Shares, (2) state transfer taxes, (3)
brokerage commissions, (4) fees and expenses of counsel and accountants for the
holders of this Warrant or the Shares.
(vi) The Company will take all necessary action
which may be required in qualifying or registering the Shares included in any
Registration Statement or post-effective amendment
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or new registration statement for offering and sale under the securities or blue
sky laws of such states as are reasonably required by the holders of such
Shares, provided that the Company shall not be obligated to execute or file any
general consent to service of process or to qualify as a foreign corporation to
do business under the laws of any such jurisdiction.
8. No Rights as Shareholder. Holder, as holder of the Warrants,
shall not be entitled to vote or receive dividends or be considered a
shareholder of the Company for any purpose, nor shall anything in this
Certificate be construed to confer on Holder, as such, any rights of a
shareholder of the Company or any right to vote, give or withhold consent to any
corporate action, to receive notice of meetings of shareholders, to receive
dividends or subscription rights or otherwise.
9. Definitions. As used in this Certificate:
(a) "Warrants" shall mean the rights evidenced by this
Certificate.
(b) "Warrant Price" shall mean $2.50 per share.
10. Notices. All demands, notices, consents and other
communications to be given hereunder shall be in writing and shall be deemed
duly given when delivered personally or five days after being mailed by
first-class mail, postage prepaid, properly addressed, if to the Company at
SIMULATIONS PLUS, INC., 40015 Sierra Highway, Bldg. B-110, Palmdale, CA 93350,
or if to Holder at . The Company and Holder may change such address at any time
or times by notice hereunder to the other.
11. Amendments; Waivers, Terminations, Governing Law; Headings.
The Warrants and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. The
Warrants shall be governed by and construed and interpreted in accordance with
the laws of the State of California. The headings in this Certificate are for
convenience of reference only and are not part of the Warrants.
Dated as of , 1997.
SIMULATIONS PLUS, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
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SIMULATIONS PLUS, INC.
SUBSCRIPTION FORM
(To be completed and signed only upon exercise of the Warrants)
TO: SIMULATIONS PLUS, INC.,
40015 Sierra Highway, Blvd. B-110
Palmdale, CA 93550
Attention: Secretary
The undersigned, the holder and registered owner of the attached
Warrants, hereby irrevocably and unconditionally elects to exercise such
Warrants and to purchase *______ shares of SIMULATIONS PLUS, INC. Common Stock,
pursuant to the terms and conditions of the Warrants, and herewith tenders a
check in the amount of $ ______ in full payment of the purchase price for such
shares and warrants, and requests that the certificate(s) for such shares and
warrants be issued in the name of and delivered to:
(Please print name and address)
_________________________________________
_________________________________________
_________________________________________
Dated:______________________________ Signature: ___________________________
*Insert here the number of shares called for on the face of the
Warrants (or in the case of partial exercise, that portion as to which the
Warrants are being exercised), without naming any adjustment or additional
Common Stock or any other securities or property which, under the adjustment
provisions of the Warrants, may be deliverable upon exercise.
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