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Exhibit 10.36
SUPERSHUTTLE INTERNATIONAL, INC.,
WARRANT AGREEMENT
THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE
SOLD, EXCHANGED, HYPOTHECATED OR TRANSFERRED IN ANY MANNER EXCEPT IN
COMPLIANCE WITH SECTION 9 OF THIS AGREEMENT.
THIS WARRANT AGREEMENT (the "Agreement") , dated as of June 15, 1995, is
made and entered into by and between SUPERSHUTTLE INTERNATIONAL, INC., a
Delaware corporation (the "Company"), and FRANK R. KLINE, JR., co-trustee of the
KLINE LIVING TRUST u/a/d MARCH 9, 1993 (the "Warrantholder").
For good and valuable consideration, receipt of which is hereby
acknowledged, the Company hereby issues to the Warrantholder warrants (as
hereinafter described, the "Warrants") to purchase up to an aggregate of
Twenty-five Thousand (25,000) (subject to adjustment pursuant to Section 5
hereof) shares (the "Shares") of the Company's Common Stock (the "Common
Stock").
This Warrant is issued pursuant to that certain Fee Agreement, dated as of
June 15, 1995 (the "Fee Agreement").
In consideration of the foregoing and for the purpose of defining the terms
and provisions of the Warrants and the respective rights and obligations
thereunder, the Company and the Warrantholder, for value received, hereby agree
as follows:
Section 1. Representations.
1.1 Investment Representation. The Warrantholder hereby represents to the
Company as follows:
1.1.1 The Warrantholder is experienced in evaluating and investing
in emerging companies such as the Company.
1.1.2 The Warrantholder is acquiring this Warrant, and the Shares
issuable upon exercise of this Warrant, for investment for its own account and
not with the view to, or for resale in connection with, any distribution
thereof. The Warrantholder understands that neither the Warrant nor the Shares
have been registered under the Securities Act by reason of a specific exemption
from the registration provisions of the Securities Act which depends upon, among
other things, the bona fide nature of the
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investment intent as expressed herein.
1.1.3 The Warrantholder acknowledges that this Warrant (and the Shares
of Common Stock issuable upon exercise hereof) must be held indefinitely unless
subsequently registered under the Securities Act or an exemption from such
registration is available. The Warrantholder is aware of the provisions of Rule
144 promulgated under the Securities Act which permit limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things the existence of a public market for
the shares, the availability of certain current public information about the
Company, the resale occurring not less than two years after a party has
purchased and paid for the security to be sold, the sale being through a
"broker's transaction" or in transactions directly with a "market maker" (as
provided by Rule 144 (f)) and the number of shares being sold during any
three-month period not exceeding specified limitations.
1.1.4 The Warrantholder understands that no public market now exists
for any of the securities issued by the Company and that it is unlikely that a
public market will exist for the Shares of Common Stock in the foreseeable
future.
1.1.5 The Warrantholder has received a copy of the Company's balance
sheets as of September 30, 1992 and 1993, together with the related statements
of income, shareholders' equity and changes in financial position for the fiscal
years then ended, with the related opinions of Arthur Andersen & Co.,
independent public accountants (the "Audited Financials"), and 1.1.6 its
unaudited balance sheet dated September 30, 1994 and the related unaudited
statements of income and retained earnings for the year then ended (the
"Unaudited Financials") (collectively the "Financial Statements"), and has had
an opportunity to discuss the Company's business, management and financial
affairs with its management and has had the opportunity to review the Company's
operations and facilities. The Warrantholder understands that such discussions,
as well as any written information issued by the Company, were intended to
describe the aspects of the Company's business and prospects which it believes
to be material but were not necessarily a thorough or exhaustive description.
1.1.7 The Warrantholder (i) is represented by independent, experienced
counsel in connection with the negotiation of this transaction and the
preparation, execution and delivery of this Warrant, the Fee Agreement and the
documents contemplated thereby, (ii) is sophisticated and knowledgeable
concerning business and financial matters generally, (iii) has substantial
experience in investments, and (iv) has the knowledge and ability to evaluate
the risks and merits of an investment in the Company. The Warrantholder has
performed extensive due diligence regarding the Company, its assets and
business, and has obtained all
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information, documents and materials it has requested, has had the opportunity
to interview the employees and officers of the Company responsible for the
management and operation of the Company's business, and has satisfied itself
regarding the Company's value, finances, business and business prospects.
1.2 Legend on Shares. Each certificate for Shares issued upon exercise of
the Warrants shall bear the following legend:
"The shares represented by this Certificate have not been registered
under the Securities Act of 1933. The shares may not be sold,
exchanged, hypothecated or transferred in any manner unless they are
registered under said Act and applicable state law or an exemption
from such registration is available.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution pursuant to a Registration Statement under the Act, of
the securities represented thereby) shall also bear the above legend unless, in
the opinion of the Company's counsel, the securities represented thereby need no
longer be subject to such restrictions.
Section 2. Term of Warrants; Exercise of Warrants.
2.1 Subject to the terms of this Agreement, the Warrantholder shall
have the right, upon the occurrence of a "Triggering Event," as hereinafter
defined, it any time until 5:00 p.m., Los Angeles time, on May 1, 2005 (the
"Termination Date"), to purchase from the Company up to the number of fully paid
and nonassessable Shares to which the Warrantholder may at the time be entitled
to purchase pursuant to this Agreement, upon surrender to the Company, at its
principal office, of this Agreement and payment to the Company of the Warrant
Price (as defined in and determined in accordance with the provisions of
Sections 4 and 5 hereof), for the number of Shares in respect of which such
Warrant is then exercised, but in no event for less than 100 Shares (unless less
than an aggregate of 100 Shares are then purchasable under all outstanding
Warrants held by a Warrantholder). Payment of the aggregate Warrant Price shall
be made in cash or by check.
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The Warrants shall be exercisable, at the election of the Warrantholder,
either in full or from time to time in part and, in the event that the Warrants
are partially exercised, a new Warrant Agreement evidencing the remaining
portion of the Warrants shall be executed by both parties hereto.
2.2 As used herein, "Triggering Event" shall mean and include the
first to occur of:
2.2.1 the successful completion of a public offering by the
Company of securities of the Company pursuant to a Registration Statement filed
with the Securities and Exchange Commission (other than a registration on Form
S-8 of a similar form contemplating the registration of securities for an
employee equity or benefit plan); or
2.2.2 the completion of a merger of the Company with or into any
other corporation or entity (other than a merger with a wholly-owned subsidiary
of the Company, or a merger solely for the purpose of changing the domicile and
state of incorporation of the Company); or
2.2.3 the completion of a sale of all or substantially all of the
assets of the Company in a single transaction or a series of related
transactions; or
2.2.4 the completion of a sale of all or substantially all of the
outstanding securities of the Company by the holders thereof in a single
transaction or a series of related transactions.
Section 3. Reservation of Shares.
There has been reserved, and the Company shall at all times keep reserved
so long as the Warrants remain outstanding, out of its authorized Common Stock,
such number of shares of Common Stock as shall be subject to purchase under the
Warrants.
Section 4. Warrant Price.
The price per Share (the "Warrant Price") at which Shares shall be
purchasable upon the exercise of the Warrants shall be Six Dollars ($6.00),
subject to further adjustment pursuant to Section 5 hereof.
Section 5. Adjustment of Warrant Price and Number of Shares.
In case the Company shall (i) pay a dividend in Common Stock or any other
security or make a distribution in Common Stock, (ii) subdivide its outstanding
Common Stock, (iii) combine its
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outstanding Common Stock into a smaller number of shares of Common Stock, or
(iv) issue by reclassification of its Common Stock other securities of the
Company, the number and kind of Shares purchasable upon exercise of the Warrants
immediately prior thereto shall be adjusted so that the Warrantholder shall be
entitled to receive the kind and number of Shares or other securities of the
Company which it would have owned or would have been entitled to receive
immediately after the happening of any of the events described above, had the
Warrants been exercised immediately prior to the happening of such event or any
record date with respect thereto. Any adjustment made pursuant to this Section 5
shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
Whenever the number of Shares purchasable upon the exercise of the Warrants
is adjusted as herein provided, the Warrant Price payable upon exercise of the
Warrants shall be adjusted by multiplying such Warrant Price immediately prior
to such adjustment by a fraction, the numerator of which shall be the number of
Shares purchasable upon the exercise of the Warrants immediately prior to such
adjustment, and the denominator of which shall be the number of Shares so
purchasable immediately thereafter.
Except as provided in this Section 5, no adjustment in respect of any cash
dividends or distributions out of earnings shall be made during the term of the
Warrants or upon the exercise of the Warrants.
Section 6. Merger or Consolidation.
In case of any merger or consolidation the Company with or into another
corporation (other than a consolidation or merger in which the Company is the
continuing corporation) , or in the case of any sale or conveyance of the
property of the Company as an entirety or substantially as an entirety in
connection with which the Company is dissolved, the Warrantholder shall have the
right thereafter (until the Termination Date) to receive upon the exercise
hereof, for the same aggregate Warrant Price hereunder immediately prior to such
event, the kind and amount of shares of stock or other securities or property
receivable upon such merger or consolidation, or upon the dissolution following
such sale or other transfer, by a holder of the number of Shares obtainable upon
exercise of this Warrant immediately prior to such event.
Section 7. Fractional Interests.
The Company shall not be required to issue fractional Shares on the
exercise of the Warrants. If any fraction of a Share would, except for the
provisions of this Section 7, be issuable on the exercise of the Warrants (or
specified portion thereof), the Company shall pay an amount in cash equal to the
then Current
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Market Price multiplied by such fraction. For purposes of this Agreement, the
term "Current Market Price" shall mean (i) if the Common Stock is traded in the
over-the-counter market and not in the NASDAQ National Market System nor on any
national securities exchange, the average per share closing bid prices of the
Common Stock on the fifteen (15) consecutive trading days immediately preceding
the date in question, as reported by NASDAQ or an equivalent generally accepted
reporting service, or (ii) if the Common Stock is traded in the NASDAQ National
Market System or on a national securities exchange, the average for the fifteen
(15) consecutive trading days immediately preceding the date in question of the
daily per share closing prices of the Common Stock in the NASDAQ National Market
System or on the principal stock exchange on which it is listed, as the case may
be. For purposes of clause (i) above, if trading in the Common Stock is not
reported by NASDAQ, the average referred to in said clause shall be as reported
in the "pink sheets" published by National Quotation Bureau, Incorporated. The
closing price referred to in clause (ii) above shall be the last reported sale
price or, in case no such reported sale takes place on such day, the average of
the reported closing bid and asked prices, in either case, in the NASDAQ
National Market System or on the national securities exchange on which the
Common Stock is then listed. In the event the Common Stock is not traded in the
NASDAQ National Market System or on a national securities exchange, the Current
Market Price shall be determined in good faith by the Board of Directors of the
Company.
Section 8. No Rights as Stockholder; Notices to Warrantholder.
Nothing contained in this Agreement shall be construed as conferring upon
the Warrantholder or its transferees any rights as a stockholder of the Company,
including the right to vote, receive dividends, consent or receive notices as a
stockholder in respect of any meeting of stockholders for the election of
directors of the Company or any other matter, except the Company shall mail to
each Warrantholder a copy of its annual report and any periodic reports provided
its shareholders. If, however, at any time prior to the expiration of the
Warrants and prior to their exercise in full, any one or more of the events
described in Section 6 shall occur, then the Company shall give notice in
writing of such event to the Warrantholder, as provided in Section 13 hereof,
as soon as reasonably practical but in any event at least 30 days prior to the
date fixed as a record date or the date of closing the transfer books for the
determination of the stockholders entitled to vote on such proposed
consolidation, merger, sale, dissolution, liquidation or winding up. Such notice
shall specify such record date or the date of closing the transfer books, as the
case may be. Failure to mail or receive such notice or any defect therein shall
not affect the validity of any action taken with respect thereto.
Section 9. Restrictions on Transfer.
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The Warrantholder agrees that prior to making any disposition of the
Warrants or the Shares, if no registration statement or past-effective amendment
thereto under the Act (collectively a "Registration Statement") with respect to
such disposition is then effective, no such disposition shall be made unless
the Company has received from the Warrantholder an opinion of counsel reasonably
satisfactory to the Company that such disposition may be made without
registration under the Act.
Section 10. Exchange, Transfer, Assignment or Loss of Warrant.
Subject to Section 9 hereof, this Warrant is exchangeable, without expense,
at the option of the Warrantholder, upon presentation and surrender hereof to
the Company at its offices for other Warrants of different denominations
entitling the holder thereof to purchase in the aggregate the same number of
Shares as are purchasable hereunder. Upon surrender of this Warrant to the
Company at its principal office with the Assignment form annexed hereto duly
executed, the Company shall, without charge, execute and deliver a new Warrant
in the name of the assignee named in such instrument of assignment and this
Warrant shall be promptly cancelled. Subject to Section 9 hereof, this Warrant
may be divided or combined with other Warrants upon presentation thereof at the
office of the Company together with a written notice signed by the Warrantholder
hereof specifying the names and denominations in which new warrants are to be
issued. Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and, in the case of loss,
theft or destruction, of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date.
Section 11. Notices.
Any notice pursuant to this Agreement by the Company or by a Warrantholder
or a holder of Shares shall be in writing and shall be deemed to have been duly
given on the day personally delivered or transmitted via facsimile, or three
days after deposited in the U.S. mail by certified mail, return receipt
requested as follows:
If to a Warrantholder or a holder of Shares:
Frank R. Kline, Jr., co-trustee of the
Kline Living Trust u/a/d March 9, 1993
437 Swarthmore Ave.
Pacific Palisades, CA 90272
Attention:
Facsimile: (310) 459-5827
If to the Company:
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SUPERSHUTTLE INTERNATIONAL, INC.
2129 West Rosecrans Avenue
Gardena, CA 90249
Attn: Mitch Rouse
Facsimile: (310) 769-4595
Any party may from time to time change the address to which notices to it
are to be delivered or mailed hereunder by notice in accordance herewith to the
other parties.
Section 12. Successors.
All the covenants and provisions of this Agreement by or for the benefit of
the Company, the Warrantholders or the holders of Shares shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 13. Applicable Law.
This Agreement shall be deemed to be a contract made under the laws of the
State of California and for all purposes shall be construed in accordance with
the laws of said State.
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Section 14. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company, the Warrantholders and the holders of Shares
any legal or equitable right, remedy or claim under this Agreement. This
Agreement shall be for the sole and exclusive benefit of the Company, the
Warrantholders and the holders of Shares.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, all as of the day and year first above written.
SUPERSHUTTLE INTERNATIONAL, INC.
By [illegible]
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Its Secretary
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THE KLINE LIVING TRUST
u/a/d March 9, 1993
/s/ Frank R. Kline, Jr.
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By: Frank R. Kline, Jr.
Its: Co-Trustee
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ASSIGMENT FORM
For value received, the undersigned registered owner of Warrants to
purchase Common Stock of SUPERSHUTTLE INTERNATIONAL, INC., a Delaware
corporation (the "Company"), represented by that certain Warrant Agreement dated
June ____, 1995 between the Company and the undersigned, hereby sells, transfers
and assigns to the assignee named below Warrants to purchase _________ shares of
the Company's Common Stock:
Assignee:
Name ____________________________
Address ____________________________
____________________________
and authorizes the Company to cancel the Warrant Agreement and to issue and
deliver a new Warrant Agreement in the name of the Assignee for the number of
Warrants so transferred hereby.
Dated: __________________________ __________________________________
Signature
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