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EXHIBIT 10.12
WARRANT TO PURCHASE SHARES OF COMMON STOCK
SIMULATIONS PLUS, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF CALIFORNIA
THIS CERTIFICATE evidences the right of Walter S. Woltosz and Virginia
E. Woltosz (the "Holders") to purchase, for the Warrant Price (as defined
below), shares of Common Stock of Simulations Plus, Inc. a California
corporation (the "Company"), subject to the terms and conditions hereinafter set
forth.
1. Term of Warrant.
Subject to the terms and conditions set forth herein, this
Warrant (the "Warrant") may be exercised on or after the date this Warrant vests
as set forth in Section 2, and at any time prior to 5 P.M. Pacific Standard Time
on that date which is five (5) years from the date of the Company's Prospectus
for its initial public offering, at which time this Warrant shall become void,
and all rights hereunder shall thereupon cease.
2. Right to Exercise. The Warrant shall vest and become exercisable
according to the following terms:
2.1 If the Company's after tax net income for the fiscal year ending
August 31, 1998 as reflected in the Company's audited financial statements is
$3,000,000.00 or more, than the Holders are granted the right to purchase
300,000 shares of the Company's Common Stock.
2.2 If the Company's after tax net income for the fiscal year ending
August 31, 1998 as reflected in the Company's audited financial statements is
$2,000,000.00 to $3,000,000.00 than the Holders are granted rights to acquire
200,000 shares of the Company's Common Stock and for each additional $100,000 of
after tax net income above $2,000,000 for each such fiscal year, the Holders are
entitled to receive warrants to acquire 10,000 shares of the Company's Common
Stock.
3. Exercise Price; Adjustment of Price and Number of Shares.
All shares of Common Stock offered pursuant to paragraphs 2.1
& 2.2 above shall be exercisable at an exercise price of $5.00 per share (the
"Exercise Price"), with the Exercise Price and the number of shares of Common
Stock purchasable upon the exercise of this Warrant, subject to adjustment from
time to time on same terms and conditions set forth in Section 12 of the Warrant
to be issued to Waldron & Co., Inc., a copy of which is attached as Exhibit
10.22 to the Company's Registration Statement relating to its initial public
offering, except that for purposes hereof, the Exercise Price shall be $5.00 per
share.
4. Manner of Exercise.
4.1 The Holders of this Warrant may exercise this Warrant, in whole or
in part, upon surrender of this Warrant with the form of subscription attached
hereto duly executed, to the Company at its corporate office in Palmdale,
California, and upon compliance with and subject to the conditions set forth
herein, together with the full Warrant Price, in lawful money of the United
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States or by certified check, bank draft or postal or express money order
payable in United States dollars to the order of the Company, for each share of
Common Stock to be purchased.
4.2 Upon receipt of this Warrant, the form of subscription duly
executed, and payment of the aggregate Warrant Price for the shares of Common
Stock for which this Warrant is being exercised, the Company shall cause to be
issued certificates for the total number of whole shares of Common Stock for
which this Warrant is being exercised in such denominations as are required for
delivery to the Holders of this Warrant, and the Company shall thereupon deliver
such certificate or certificates to the Holders or their nominee.
4.3 In case the Holders shall exercise this Warrant with respect to
less than all of the shares of the Common Stock that may be purchased under this
Warrant, the Company shall execute a new Warrant for the balance of the shares
of Common Stock that may be purchased upon exercise of this Warrant and shall
deliver such new Warrant to the Holders.
5. Restrictions on Exercise.
The Warrant may not be exercised if the issuance of the shares
of Common Stock 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 Warrant, the Company may require the Holders to
make such representations and warranties as may be required by applicable law or
regulation.
6. Stock Fully Paid; Reservation of Shares.
The Company covenants and agrees that all shares of Common
Stock will, upon issuance and payment in accordance herewith, by fully paid,
validly issued and nonassessable. The Company further covenants and agrees that
during the term of the Warrant the Company will at all times have authorized and
reserved for the purpose of this issue upon exercise of the Warrant at least the
maximum number of shares of the Company's Common Stock as are issuable upon the
exercise of the Warrant.
7. Fractional Shares.
No fractional shares of Common Stock will be issued in
connection with any subscription hereunder but, in lieu of fractions shares, the
Company shall make a cash payment therefor upon the basis of the fair market
value of the shares.
8. Payment of Taxes.
The Company covenants and agrees that it will pay, when due
and payable, any and all taxes which may be payable relating to the issuance of
this Warrant, or the issuance of any shares of Common Stock upon the exercise of
this Warrant. The Company shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issuance or delivery
of this Warrant or of the shares of Common Stock in a name other than that of
Holders at the time of surrender, and until the payment of such tax, the Company
shall not be required to issue such shares of Common Stock.
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9. Restrictions on Transfer.
The Warrant is restricted from sale, transfer, assignment or
hypothecation by operation of law. The Warrant has not been registered under the
Securities Act of 1933 (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 Holders understand that
because the Warrant is not registered, the Holders must hold the Warrant
indefinitely unless it is registered under the Act and any applicable state
securities laws or must obtain exemptions from registration. The Holders
represent and warrant that the Holders are purchasing the Warrant for their own
account for investment and not with the view to distribution, assignment, resale
or other transfer of the Warrant. Except as specifically stated herein, no other
person has a direct or indirect beneficial interest in the Warrant.
10. No Rights as Shareholder.
Holders, as Holders of the Warrant, 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
Holders, 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.
11. 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 Holders at
. The Company and Holders may change such address at any time or
times by notice hereunder to the other.
12. Amendments; Waivers; Terminations.
The Warrant 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.
13. Governing Law.
The Warrant shall be governed by, and construed in accordance
with, the internal substantive laws of the State of California, without regard
to choice of law or conflicts of law principles. The Company and Holders
recognize and hereby irrevocably consent to the exclusive jurisdiction over it
or them, as the case may be, of the Federal District Court for the Central
District of California or the Superior Court of California, County of Los
Angeles, in connection with any action or proceeding (whether it be for contract
or tort, at law or in equity, or otherwise) arising out of or relating in any
way to the Warrants, or any other document relating hereto or delivered in
connection with the transactions contemplated hereby.
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14. Captions.
The captions used in this Certificate are solely for the convenience of
the parties hereto and such captions do not constitute a part of the Warrant.
Dated as of ______________, 1996. 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 Warrant)
TO: Simulations Plus, Inc.
40015 Sierra Highway, Bldg. B-110
Palmdale, CA 93550
Attention: Secretary
The undersigned, the Holders and registered owners of the attached
Warrant, hereby irrevocably and unconditionally elect to exercise such Warrant
and to purchase * shares of Simulations Plus, Inc. Common Stock, pursuant to the
terms and conditions of the Warrant, and herewith tender a check in the amount
of $________ in full payment of the purchase price for such shares, and request
that the certificate(s) for such shares be issued in the name of and delivered
to:
(Please print name and address)
Dated: Signature:
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*Insert here the number of shares called for on the face of the Warrant
(or in the case of partial exercise, that portion as to which the Warrant is
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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