Active Link Communications, Inc.
Form 8-K
Exhibit 10(c)
The securities represented by this Warrant and issuable upon exercise hereof
have not been registered under the United States Securities Act of 1933, as
amended (the "1933 Act"), or under the provisions of any applicable state
securities laws, but have been acquired by the registered holder hereof for
purposes of investment and in reliance on statutory exemptions under the 1933
Act, and under any applicable state securities laws. These securities and the
securities issued upon exercise hereof may not be sold, pledged, transferred or
assigned, nor may this Warrant be exercised, except in a transaction which is
exempt under the provisions of the 1933 Act and any applicable state securities
laws or pursuant to an effective registration statement; and in the case of an
exemption, the Company may request an opinion of counsel satisfactory to the
Company that such transaction does not require registration of any such
securities.
VOID AFTER 3:00 P.M. MOUNTAIN TIME ON NOVEMBER 12, 2006
WARRANT TO PURCHASE 3,000,000 SHARES OF COMMON STOCK
ACTIVE LINK COMMUNICATIONS, INC.
No. W-02-DLH-2
FOR VALUE RECEIVED, Active Link Communications, Inc. (the "Company"), a
Colorado corporation with its principal offices located at 1840 Center Point
Circle, Naperville, IL 60563, hereby certifies that Donnette L. Hall (the
"Holder") is entitled, subject to the provisions of this Warrant, to purchase
from the Company, at any time, or from time to time during the period commencing
on the date hereof and expiring at 3:00 p.m. Mountain Time, on November 12, 2006
(the "Expiration Date"), up to Three Million (3,000,000) fully paid and
non-assessable shares of the Company's Common Stock (the "Warrant Stock") at a
price of $.25 per share (the "Exercise Price"). The number of shares of Warrant
Stock and the Exercise Price may be adjusted from time to time as hereinafter
set forth.
The Holder agrees with the Company that this Warrant is issued, and all
the rights hereunder shall be held subject to, all of the conditions,
limitations and provisions set forth herein.
1. Exercise of Warrant.
1.1 Exercise Procedures. Subject to the limitations set forth
below in this Section 1 and in Section 5 hereof, this Warrant may be exercised
in whole or in part, during the period expiring at 3:00 p.m. Mountain Time on
the Expiration Date or, if such day is a day on which banking institutions in
Denver, Colorado are authorized by law to close, then on the next succeeding day
that shall not be such a day, by presentation and surrender of this Warrant to
the Company at its principal office, or at the office of its transfer agent, if
any, with the Warrant Exercise Form attached hereto duly executed and
accompanied by payment (either in cash or by certified or official bank check,
payable to the order of the Company) of the Exercise Price for the number of
shares specified in such form and instruments of transfer, if appropriate, duly
executed by the Holder or his or her duly authorized
attorney. As soon as practicable after each such exercise of the Warrants the
Company shall issue and deliver to the Holder a certificate or certificates for
the Warrant Stock, registered in the name of the Holder. If this Warrant should
be exercised in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the rights of the
Holder thereof to purchase the balance of the shares purchasable hereunder. Upon
receipt by the Company of this Warrant, together with the Exercise Price, at its
office, or by the transfer agent of the Company, if any, at its office, in
proper form for exercise, the Holder shall be deemed to be the holder of record
of the shares of Warrant Stock issuable upon such exercise, notwithstanding that
the stock transfer books of the Company shall then be closed or that
certificates representing such shares of Warrant Stock shall not then be
actually delivered to the Holder. The Holder shall pay any and all documentary,
stamp or similar issue or transfer taxes and fees payable in respect of the
issue or delivery of shares of Warrant Stock on exercise of this Warrant.
1.2 Conversion Right.
The Holder shall have the right (the "Conversion Right") to convert
this Warrant into shares of the Company's Common Stock as provided in this
Section 1.2 at any time or from time to time prior to the Expiration Date.
a. Upon exercise of the Conversion Right with respect to a
particular number of shares of Warrant Stock (the "Conversion Shares"), the
Company shall deliver to the Holder, without payment by the Holder of any
Exercise Price or any cash or other consideration, that number of shares equal
to the quotient obtained by dividing the Net Value (as hereinafter defined) of
the Conversion Shares by the Current Market Price (as hereinafter defined) of a
single Share, determined in each case as of the close of business on the
Conversion Date (as hereinafter defined). The "Net Value" of the Conversion
Shares shall be determined by subtracting the Exercise Price of one share from
the Current Market Price of one share and multiplying the remainder by the
number of Warrants being converted. No fractional shares shall be issuable upon
exercise of the Conversion Right, and if the number of shares to be issued in
accordance with the foregoing formula is other than a whole number, the Company
shall pay to the Holder the net amount in cash equal to the Current Market Price
of the resulting fractional share.
b. The Conversion Right may be exercised by the Holder by the
surrender of the Warrant at the principal office of the Company or at the office
of the Company's transfer agent, if any, together with a written statement
specifying that the Holder thereby intends to exercise the Conversion Right and
indicating the number of shares of Warrant Stock subject to the Warrant which
are being surrendered (referred to in subparagraph 1.2(a) above as the
Conversion Shares) in exercise of the Conversion Right. Such conversion shall be
effective upon receipt by the Company of the Warrant, or on such later date as
is specified therein (the "Conversion Date"), but not later than the Expiration
Date. Certificates for the shares issuable upon exercise of the Conversion
Right, together with a check in payment of any fractional amount and, in the
case of a partial exercise a new Warrant evidencing the Warrant Stock remaining
subject to the Warrant, shall be issued as of the Conversion Date and shall be
delivered to the Holder within seven days following the Conversion Date.
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c. The "Current Market Price" shall be determined as follows:
(1) If the Common Stock is listed on a national
securities exchange or admitted to unlisted trading privileges on such an
exchange or quoted on either the National Market System or the Small Cap Market
of the automated quotation service operated by The Nasdaq Stock Market, Inc.
("Nasdaq"), the current value shall be the last reported sale price of that
security on such exchange or system on the day for which the current market
price is to be determined or, if no such sale is made on such day, the average
of the highest closing bid and lowest asked price for such day on such exchange
or system; or
(2) If the Common Stock is not so listed or quoted
or admitted to unlisted trading privileges, the Current Market Value shall be
the average of the last reported highest bid and lowest asked prices quoted on
the Nasdaq Electronic Bulletin Board, or, if not so quoted, then by the National
Quotation Bureau, Inc. on the last business day prior to the day for which the
Current Market Price is to be determined; or
(3) If the Common Stock is not so listed or quoted
or admitted to unlisted trading privileges and bid and asked prices are not
reported, the Current Market Price shall be determined in such reasonable manner
as may be prescribed from time to time by the Board of Directors of the Company.
2. Fractional Shares. The Company shall not be required to issue
a fractional share upon the exercise of this Warrant, but rather the aggregate
number of shares issuable will be rounded up or down to the nearest full share.
3. Limitation on Transfer. Subject to the provisions of Sections
6 and 7 hereof, any assignment or transfer of this Warrant shall be made by
presentation and surrender of this Warrant to the Company at its principal
office or at the office of its transfer agent, if any, accompanied by a duly
executed Assignment Form. Upon the presentation and surrender of these items to
the Company, the Company, at its sole expense, shall execute and deliver to the
new Holder a new Warrant, in the name of the new Holder as named in the
Assignment Form, and the Warrant presented or surrendered shall at that time be
cancelled.
4. Rights of the Holder. The Holder shall not, by virtue hereof,
be entitled to any rights of a shareholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
Warrant.
5. Restrictions on Exercise Imposed by Federal and State
Securities Laws. Holder hereby acknowledges that neither this Warrant nor any of
the securities that may be acquired upon exercise of this Warrant have been
registered under the 1933 Act or under the securities laws of any state. The
Holder acknowledges that, upon exercise of this Warrant, the securities to be
issued upon such exercise may come under applicable federal and state securities
(or other) laws requiring registration, qualification or approval of
governmental authorities before such securities may be validly issued or
delivered upon notice of such exercise. With respect to any such securities,
this Warrant may not be exercised by, and securities shall not be issued to, any
Holder in which such exercise would be unlawful. As a condition to exercise, the
Company may require the Holder to sign a representation
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letter confirming compliance with this Agreement and applicable federal and
state securities laws and other applicable laws, and may require the Holder to
provide an opinion of counsel that the exercise and issuance of the Warrant
Stock will not violate law, such counsel and such opinion to be satisfactory to
the Company and its counsel.
6. Transfer to Comply With the 1933 Act. This Warrant and any
Warrant Stock may not be sold, transferred, pledged, hypothecated or otherwise
disposed of except as follows:
(1) To a person who, in the opinion of counsel to the Company,
is a person to whom this Warrant or the Warrant Stock may legally be transferred
without registration and without delivery of a current prospectus under the 1933
Act with respect thereto and then only against receipt of an agreement of such
person to comply with the provisions of this Section 6 with respect to any
resale or other disposition of such securities, or
(2) To any person upon delivery of a prospectus then meeting
the requirements of the 1933 Act relating to such securities and the offering
thereof for such sale or disposition, and thereafter to all successive
assignees.
7. Legend. Unless the shares of Warrant Stock have been
registered under the 1933 Act, upon exercise of any of the Warrants and the
issuance of any of the shares of Warrant Stock, all certificates representing
shares shall bear on the face thereof substantially the following legend, as
well as any other legends necessary to comply with applicable state and federal
laws for the issuance of such shares:
The shares represented by this Certificate have not been
registered under the United States Securities Act of 1933, as amended
("the 1933 Act") or any state securities laws and are "restricted
securities" as that term is defined in Rule 144 under the 1933 Act. The
shares may not be offered for sale, sold, pledged, hypothecated or
otherwise transferred except pursuant to an effective registration
statement under the 1933 Act or pursuant to an exemption from
registration under the 1933 Act the availability of which is to be
established to the satisfaction of the Company. If the shares are to be
sold or transferred pursuant to an exemption from the registration
requirements the Company may require a written opinion of counsel,
satisfactory to counsel for the Company, to the effect that
registration is not required and that such transfer will not violate
the 1993 Act or any other applicable securities laws.
8. Notices. All notices required hereunder shall be in writing
and shall be deemed given when telegraphed, sent by facsimile, delivered
personally or within three days after mailing when mailed by certified or
registered mail, return receipt requested, at the address of such party as set
forth on the first page, or at such other address of which the Company or Holder
has been advised by notice hereunder.
9. Applicable Law. This Warrant is issued under and shall for
all purposes be governed by and construed in accordance with the laws of the
State of Colorado.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on
its behalf, in its corporate name, by its duly authorized officer, all as of the
day and year first above written.
ACTIVE LINK COMMUNICATIONS, INC.,
a Colorado corporation
Dated: November 12, 2002 By: /s/ Timothy A. Ells
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Authorized Officer
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WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing _________ shares of Common Stock of Active
Link Communications, Inc., a Colorado corporation, and hereby makes payment of
$__________ in payment therefor. The undersigned understands that exercise of
the within Warrant is subject to, among other things, the limitations provided
in Section 1 and compliance with Section 6 of the within Warrant.
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Signature
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Signature, if jointly held
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Social Security or Taxpayer
Identification Number
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Date
ASSIGNMENT FORM
FOR VALUE RECEIVED, _______________________, hereby sells, assigns and
transfers unto
Name:
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(Please type or print in block letters)
Address:
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the right to purchase Common Stock of Active Link Communications, Inc.
represented by this Warrant to the extent of ____ Shares as to which such right
is exercisable and does hereby irrevocably constitute and appoint
_________________________ Attorney to transfer the same on the books of the
Company with full power of substitution in the premises. The undersigned
understands that assignment of this Warrant is subject to compliance with
Section 6 of the Warrant and the Assignee's acknowledgement of the provisions
and restrictions of the Warrant.
Signature: Dated:
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Notice: The signature on this Assignment must correspond with the name
as it appears upon the face of this Warrant in every
particular, without alteration or enlargement or any change
whatever.
WARRANT CONVERSION EXERCISE FORM
TO: Active Link Communications, Inc.
Pursuant to Section 1.2 of the Warrant Agreement, the Holder hereby
irrevocably elects to convert Warrants into shares of the Company's Common
Stock. The undersigned understands that exercise of the Warrant is subject to,
among other things, the limitations provided in Section 1 and compliance with
Section 5 of the Warrant. A conversion calculation is attached hereto.
The undersigned requests that certificates for such shares be issued as
follows:
Name:
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Address:
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Deliver to:
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and that a new Warrant Certificate for the balance remaining of the Warrants, if
any, subject to the Warrant be registered in the name of, and delivered to, the
undersigned at the address stated above.
Signature: Date:
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CALCULATION OF WARRANT CONVERSION
Net Value of the Conversion Shares
Current Market Price
Current Market Price Per Share $
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Net Value of the Conversion Shares (Current Market Price Per Share - Exercise
Price) Number of Shares of Warrant Stock
$ - $ =
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x =
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Shares to be Issued
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Cash in Lieu of Fractional Shares $ (1)
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(1) Active Link Communications, Inc. to pay for fractional shares in cash @
Current Market Price Per Share.