As filed with the Securities and Exchange Commission on November 7, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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DCX, INC.
(Exact name of registrant as specified in its charter)
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COLORADO 84-0868815
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1597 COLE BOULEVARD, SUITE 300
GOLDEN, COLORADO 80401
(303) 274-8708
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
G. STEPHEN CARREKER
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
DCX, INC.
1597 COLE BOULEVARD, SUITE 300
GOLDEN, COLORADO 80401
(303) 274-8708
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
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Copy to:
Lester R. Woodward, Esq.
Davis, Graham & Stubbs LLP
Suite 4700
370 Seventeenth Street
Denver, Colorado 80202
(303) 892-9400
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time
to time after the effective date of this Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
<PAGE>
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed maximum Proposed
Amount to be offering price maximum aggregate Amount of
Title of securities to be registered registered per unit(1) offering price(1) registration fee
<S> <C> <C> <C> <C>
Common Stock, no par value 4,004,303 $1.3868 $5,553,388 $1,682.85
per share shares
</TABLE>
(1) Calculated solely for purposes of determining the registration fee payable
pursuant to Rule 457, and is based upon the sum of the product of warrants
for 1,140,446 shares times their respective exercise prices, and an
aggregate offering price of $4,116,795, pursuant to Rule 457(c), for
2,863,857 shares being offered by Selling Stockholders, based upon the
average of the high and low sales prices of the Company Common Stock on
November 5, 1997, as reported on the Nasdaq SmallCap Market.
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any State.
SUBJECT TO COMPLETION, DATED NOVEMBER 7, 1997
DCX, INC.
2,863,857 SHARES OF COMMON STOCK OFFERED BY THE SELLING STOCKHOLDERS
1,140,446 SHARES OF COMMON STOCK ISSUABLE
UPON THE EXERCISE OF CERTAIN WARRANTS
This Prospectus relates to 2,863,857 shares of Common Stock
(collectively the "Stockholder Securities") offered by the Stockholders of the
Company named under "Selling Stockholders" (the "Selling Stockholders"). This
Prospectus also relates to 1,140,446 shares of Common Stock, no par value (the
"Common Stock"), of DCX, Inc., a Colorado corporation (the "Company"), issuable
upon exercise of warrants issued by the Company (collectively the "Warrant
Shares").
The Selling Stockholder Securities are being offered by the former
shareholders of PlanGraphics, Inc. ("PlanGraphics"), a wholly-owned subsidiary
of the Company, certain consultants engaged by the Company in connection with
the transaction by which PlanGraphics became a Company subsidiary, and by other
consultants and business affiliates of PlanGraphics and the Company. Stockholder
Securities may be sold from time to time in transactions (which may include
block transactions) on the Nasdaq SmallCap Market, in negotiated transactions,
or by a combination of such methods of sale at fixed prices which may be
changed, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. The holders of
Stockholder Securities may effect such transactions by selling Stockholder
Securities to or through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
holders of Stockholder Securities and/or the purchasers of Stockholder
Securities for whom such broker-dealers may act as agent or to whom they may
sell as principal or both (which compensation as to a particular broker-dealer
might be in excess of customary commissions).
The Warrant Shares are issuable under certain warrants issued by the
Company as compensation for services, or in connection with other business
transactions. These consist of: one warrant issued to Transition Partners, Ltd.
to acquire up to 111,260 shares, exercisable in full at an exercise price of
$1.00 per share, exercisable until January 14, 2002, as compensation for certain
financial and management advisory services to the Company, and one warrant
issued to Transition Partners, Ltd. to acquire up to 295,056 shares, at an
exercise price of $1.00 per share, exercisable upon and to the extent of the
issuance of additional shares of Common Stock by the Company pursuant to the
anti-dilution provisions of the consulting agreement between Transition
Partners, Ltd. and the Company, exercisable until January 14, 2002; one warrant
issued to Copeland Consulting Group, Inc., a company owned by Gene R.
<PAGE>
Copeland, a Managing Director of Transition Partners, Ltd., to purchase up to
111,260 shares, exercisable in full at an exercise price of $1.00 per share,
exercisable until January 14, 2002, as compensation for the financial and
management advisory services provided to the Company by Transition Partners,
Ltd., and one warrant issued to Copeland Consulting Group, Inc. to acquire up to
295,056 shares, at an exercise price of $1.00 per share, exercisable upon and to
the extent of the issuance of additional shares of Common Stock by the Company
pursuant to the anti-dilution provisions of the consulting agreement between
Transition Partners, Ltd. and the Company, exercisable until January 14, 2002;
warrants issued to Spencer Edwards, Inc. to purchase up to 120,000 shares,
exercisable in full at an exercise price of $2.25 per share, exercisable until
June 30, 1999, as compensation for certain financial advisory services; warrants
issued to Coretech, Ltd. to acquire up to 36,281 shares, exercisable in full at
an exercise price of $1.875 per share, exercisable through November 8, 1998, for
services in connection with an equity offering by the Company; warrants issued
to SKB Corporation to purchase up to 74,033 shares, exercisable in full at an
exercise price of $1.3929 per share, exercisable through October 10, 1998, in
connection with certain business transactions between the Company and SKB
Corporation; and warrants issued to Gerald Alexander to purchase up to 97,500
shares, exercisable in full at an exercise price of $1.875 per share,
exercisable through August 1, 2000, for services in connection with an equity
offering by the Company.
This offering will terminate as to particular Warrant Shares on the
expiration date of the warrant under which such Warrant Shares are exercisable.
This offering will terminate as to the Stockholder Securities held by each
Selling Stockholder on a date determined pursuant to an agreement between the
Company and such Selling Stockholder. See "Selling Stockholders" and "Sale of
Shares."
None of the proceeds from the sale of the Stockholder Securities by
the Selling Stockholders will be received by the Company. The Company has
generally agreed to bear all expenses (other than underwriting discounts and
selling commissions and fees and expenses of counsel or other out-of-pocket
expenses incurred by the Selling Stockholders) in connection with the
registration and sale of the Stockholder Securities. The Company has agreed to
indemnify certain Selling Stockholders against specified liabilities, including
liabilities under the Securities Act of 1933, as amended (the "Act"). See
"Selling Stockholders" and "Sale of Shares."
The Common Stock is traded on the Nasdaq SmallCap Market under the symbol
"DCXI."
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
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Proceeds to Company or
Price to Public Commissions Selling Stockholders(1)
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PROCEEDS TO SELLING
STOCKHOLDER SECURITIES............................. STOCKHOLDERS
<S> <C> <C> <C>
Per Share.......................................... (2) N/A (2)
Total.............................................. (2) N/A (2)
Common Stock Issuable upon
EXERCISE OF WARRANTS............................... PROCEEDS TO COMPANY
Per Share.......................................... $1.2596(3) N/A $1.2596
Total.............................................. $1,436,593 N/A $1,436,593
</TABLE>
(1) Before reduction for expenses of the offering to be paid by the company,
estimated to be $25,983.00.
(2) Amounts cannot be determined, since price to the public may be the market
price prevailing at the time of sale, a price related to such market price
or a negotiated price. The closing price of the Company's Common Stock on
the Nasdaq SmallCap Market on November 6, 1997 was $1.50 per share.
(3) Weighted average exercise price.
The date of this Prospectus is November 7, 1997.
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<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy and information statements and
other information concerning the Company can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 as well as of the
following Regional Offices; Northwestern Atrium Center, Citicorp Center,
Chicago, Illinois 60661; and 7 World Trade Center, Suite 1300, New York, New
York 10048. Copies of any such material can be obtained from the Public
Reference Section of the Commission, Washington, D.C. 20549 at prescribed rates.
The Commission also maintains a website at http:\\www.sec.gov that contains
reports, proxy and information statements and other information.
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by DCX, Inc. with the Commission are
incorporated by reference in this Prospectus:
(1) Annual Report on Form 10-KSB for the year ended September 30, 1996;
(2) Current Report on Form 8-K, dated November 12, 1996;
(3) Current Report on Form 8-K, dated December 11, 1996;
(4) Quarterly Report on Form 10-QSB for the quarter ended December 31,
1996;
(5) Quarterly Report on Form 10-QSB/A-1 for the quarter ended December 31,
1996;
(6) Current Report on Form 8-K, dated January 15, 1997;
(7) Current Report on Form 8-K, dated March 28, 1997;
(8) Quarterly Report on Form 10-QSB for the quarter ended March 31, 1997;
(9) Quarterly Report on Form 10-QSB/A-1 for the quarter ended March 31,
1997;
(10) Current Report on Form 8-K, dated April 21, 1997;
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<PAGE>
(11) Quarterly Report on Form 10-QSB for the quarter ended June 30, 1997
(12) Quarterly Report on Form 10-QSB/A-1 for the quarter ended June 30,
1997;
(13) Current Report on Form 8-K, dated July 31, 1997;
(14) Current Report on Form 8-K, dated August 13, 1997;
(15) Definitive Proxy Statement, dated August 27, 1997;
(16) Current Report on Form 8-K, dated September 9, 1997;
(17) Current Report on Form 8-K, dated September 22, 1997;
(18) Current Report on Form 8-K, dated October 8, 1997;
(19) Current Report on Form 8-K dated October 14, 1997;
(20) Current Report on Form 8-K/A-1, dated September 22, 1997;
(21) Current Report on Form 8-K/A-1, dated October 8, 1997; and
(22) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, filed March 3, 1986
(File No. 0-14273).
ALL DOCUMENTS SUBSEQUENTLY FILED BY THE COMPANY PURSUANT TO SECTIONS
13(A), 13(C), 14 OR 15(D) OF THE EXCHANGE ACT PRIOR TO THE TERMINATION OF THIS
OFFERING SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND
TO BE A PART HEREOF FROM THE DATE OF FILING OF SUCH DOCUMENTS. ANY STATEMENT
CONTAINED IN A DOCUMENT INCORPORATED OR DEEMED TO BE INCORPORATED BY REFERENCE
SHALL BE DEEMED TO BE MODIFIED OR SUPERSEDED FOR PURPOSES OF THIS PROSPECTUS TO
THE EXTENT THAT A STATEMENT CONTAINED HEREIN OR IN ANY OTHER SUBSEQUENTLY FILED
DOCUMENT WHICH ALSO IS OR IS DEEMED TO BE INCORPORATED BY REFERENCE HEREIN
MODIFIES OR SUPERSEDES SUCH STATEMENT. ANY STATEMENT SO MODIFIED OR SUPERSEDED
SHALL NOT BE DEEMED, EXCEPT AS SO MODIFIED OR SUPERSEDED, TO CONSTITUTE A PART
OF THIS PROSPECTUS.
The Company will provide without charge to each person to whom a
copy of this Prospectus is delivered, upon the oral or written request of such
person, a copy of any document incorporated in this Prospectus by reference,
except exhibits to such information unless such exhibits are also expressly
incorporated by reference herein. Requests for such information should be
directed to DCX, Inc., 1597 Cole Boulevard, Suite 300, Golden, Colorado 80401,
Attention: Corporate Secretary, telephone (303) 274-8708.
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<PAGE>
THE OFFERING
Common Stock Issuable Upon
the Exercise of the Warrants......... The Company is offering 1,140,446 shares
of Common Stock issuable upon the
exercise of certain warrants, at exercise
prices ranging from $1.00 to $2.25 per
share.
Common Stock Offered by the
Selling Stockholders................. The Selling Stockholders, who are
identified under "Selling Stockholders,"
are offering 2,863,857 shares of Common
Stock, issued by the Company in or in
connection with its acquisition of
PlanGraphics, Inc., or in connection
with other business transactions by
PlanGraphics or the Company.
Securities Outstanding............... As of November 6, 1997, 8,237,146 shares
of Common Stock, 1,680 shares of Series
A 6% Convertible Redeemable Preferred
Stock, and authorized or outstanding
warrants and options to purchase
approximately 4,534,339 shares of Common
Stock.
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<PAGE>
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus includes and incorporates by reference statements
that are not purely historical and are "forward-looking statements" within the
meaning of Section 27A of the Act and Section 21E of the Exchange Act, including
statements regarding the Company's expectations, hopes, beliefs, intentions or
strategies regarding the future. All statements other than statements of
historical fact included in or incorporated by reference in this Prospectus,
including without limitation, expected growth of the domestic and global
geographic information systems markets, beliefs regarding the strength of the
Company's market position with respect to new or contemplated business
strategies and activities, expectations regarding availability and marketability
of new digital imaging products and proceeds, anticipated growth in the
Company's revenue and profitability, cash operating costs and certain
significant expenses, and potential acquisitions of, or strategic partnering
with, other geographic information system providers. Factors that could cause
actual results to differ materially include, among others, the entry of new
companies into the geographic information system business, unanticipated
competition from new strategic alliances in the industry, increased price
competition from software manufacturers and their affiliated vendors, user
shifts toward more standardized, off the shelf products and a decreased reliance
on custom design software services, shifts in governmental policy on the
availability of government-owned data and data procurement platforms to
commercial and other public sector users, difficulties in hiring and retaining
sufficient numbers of professional and other skilled personnel, force majeure
events, accidents, and general domestic and international economic and political
conditions and other factors described in this Prospectus and in the Company's
annual reports on Form 10-KSB, quarterly reports on Form 10-QSB and current
reports on Form 8-K filed with the Securities and Exchange Commission. Many of
such factors are beyond the Company's ability to control or predict. All
forward-looking statements included or incorporated by reference in this
Prospectus are based on information available to the Company on the date hereof,
and the Company assumes no obligation to update such forward-looking statements.
Although the Company believes that the assumptions and expectations reflected in
such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to have been correct or that the Company will take
any actions that may presently be planned. Certain important factors that could
cause actual results to differ materially from the Company's expectations are
disclosed under the "Risk Factors" section of this Prospectus. All subsequent
written or oral forward- looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their entirety by such
factors.
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<PAGE>
RISK FACTORS
The securities offered hereby involve a high degree of risk,
including, but not limited to, the risk factors described below. Each
prospective investor should carefully consider the following risk factors
inherent in and affecting the business of the Company before making an
investment decision. Investment risks inherent in the geographic information
systems industry are discussed below as risks associated with an investment in
the Company by virtue of its ownership of PlanGraphics, and because the
geographic information systems business is the principal business focus of both
PlanGraphics and the Company. References in "Risk Factors" to the Company refer
both to the Company and to PlanGraphics, unless the context requires otherwise.
ACCUMULATED DEFICIT; OPERATING EXPENSES; CONTINUATION AS A GOING
CONCERN. Although PlanGraphics has achieved positive net income in each of its
two most recent fiscal years, in their report on the financial statements for
the nine month fiscal year ended September 30, 1996, PlanGraphics referred to
its accumulated deficit and stated that its ability to continue as a going
concern was dependent on either its ability to continue to successfully control
costs or obtain the necessary funding to continue its operations. In its efforts
to respond to opportunities presented by market expansion and diversification in
the geographical information systems industry, PlanGraphics has expanded its
workforce of professional personnel and related support staff and has incurred,
as a result, significant growth in related operating expense. While PlanGraphics
has identified some areas in which to control and even reduce these costs,
operating costs remain considerable in relation to revenue and there can be no
assurance that the Company will be able to control costs and generate revenue at
levels which will result in profitable operations in the future. Since June 30,
1997, the Company has raised approximately $1,615,000 in net equity capital,
debt financing of approximately $545,000, and increased its cash reserves by
approximately $1,045,000 by its sale of the manufacturing portion of its
business. In addition, in connection with the recent acquisition of PlanGraphics
by the Company some $290,000 of PlanGraphics' long-term debt was converted into
equity resulting in an associated reduction in consolidated debt. While
substantially all of the proceeds of these capital inflows have been applied
toward outstanding debt or payables, or to the working capital requirements of
the Company and PlanGraphics, the Company believes that the combination of
PlanGraphics into DCX, Inc., a publicly traded company, may facilitate its
acquisition of additional capital to fund its geographic information system
operating and growth strategies. There can be no assurance, however, that the
Company will be able to obtain additional capital, or that the Company's
profits, if any, will be sufficient to cover the operating expense and capital
requirements of the Company.
LIQUIDITY, CAPITAL REQUIREMENTS; NEED FOR ADDITIONAL FINANCING. The
Company has combined capital obligations under leases and debt instruments of
approximately $70,000 per month. While the Company believes that it has
sufficient cash reserves to meet its obligations in the near term, there can be
no assurance that the Company will be able to meet growing working capital needs
in the future. Any inability to obtain needed capital could have a material
adverse effect on the Company and its presently contemplated strategic growth
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<PAGE>
strategies. Additional equity financing may involve substantial dilution to the
interests of the Company's then-existing shareholders.
REAL PROPERTY; MORTGAGE OBLIGATIONS. The Company remains obligated
on a thirty-month real property mortgage covering its aircraft component
assembly manufacturing facility and site, which it has leased to a third party
until March 31, 1998, subject to extension for up to thirty months, for a
monthly rental which exceeds the Company's monthly mortgage and related expense
associated with the property. The lessee also holds an option to purchase the
property. In the event the lessee does not exercise its option, the Company will
remain obligated on the mortgage until such time as it can find a buyer for the
property or the note on the property is repaid. In addition, the Company remains
responsible under the lease for certain structural and mechanical repair
obligations with respect to the facility. The mortgage is secured by a lien on
the real property and by an assignment of the lease to the Company's lender. Any
default by the lessee on its lease obligations, and the inability of the Company
to secure another tenant or sell the property in a timely manner at an
acceptable price, could have a material adverse effect on the Company.
Additionally, PlanGraphics is committed to a long-term capital lease on its main
office facility, requiring annual lease payments of approximately $320,000.
While the Company believes its cash reserves are sufficient to satisfy these
lease obligations in the near term, any inability of the Company to remain
current on its lease payments may result in the loss of this office facility,
which could have a material adverse effect on the Company.
OUTSTANDING INDEBTEDNESS. In order to satisfy capital requirements
and finance the Company's operations, the Company has incurred a certain amount
of indebtedness and, even after the completion of this offering and other recent
financings, and the application of any proceeds therefrom, some indebtedness
will remain outstanding. While the Company believes that it has sufficient
liquid assets to meet its obligations in the near term, it cannot be assured of
attaining consistent positive net income and is subject to the risk that its
cash flow may be inadequate to make required payments on its indebtedness and
capital expenses. A portion of the value of the Company's assets has been
pledged as collateral to secure Company debt. There can be no assurance that the
Company will continue to be able to make required payments on its indebtedness
and leases in the future.
DEPENDENCE ON PRINCIPAL CLIENT. The consulting business is
inherently subject to the aggregation of a substantial amount of business around
one client or a small number of significant clients. For the last three years, a
significant portion of PlanGraphics' revenue has been derived from one client.
For the years ended September 30, 1997, September 30, 1996 and December 31,
1995, approximately 30%, 34.8% and 34.7%, respectively, of PlanGraphics'
recognized revenues were derived from its largest contract. While the Company
anticipates that the proportionate amount of its total revenue allocable to this
client will decrease in subsequent fiscal years, the sudden loss of this
investor-owned utility client could have a material adverse effect on the
Company.
DEPENDENCE ON GOVERNMENT CONTRACTS. The Company is significantly
dependent upon local, state and foreign government contracts for the provision
of its services. In each of
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fiscal years 1997, 1996 and 1995, government contracts represented approximately
30% of the Company's gross revenue. Government contracts are entirely dependent
upon the applicable budgeting process and procurement decisions of the various
government agencies and entities. There can be no assurance that government
contracting revenues will remain stable.
COMPETITION. The market for geographic information system advisory
and implementation services is highly competitive. The Company competes with a
number of companies engaged in offering similar services. These include in-house
services offered by engineering firms, and consulting services offered by
software and hardware developers and their affiliates below cost, who can then
recover these losses in follow-on hardware and software sales and support
services. Many of these firms, developers and manufacturers, individually or
with their affiliates, possess substantially greater financial, marketing,
personnel and other resources than the Company. In addition, several of the
Company's competitors who are not themselves hardware or software manufacturers
have established strategic relationships with manufacturers, permitting them to
compete effectively with the Company on the basis of price as to certain
products. Because of their greater resources, some of the Company's competitors
may be able to respond more quickly to new or emerging technologies and changes
in client requirements. Further, as the market for geographic information
systems and related services grows, software and hardware designers and
manufacturers will be incentivized to sell products with increased
standardization and interoperability. Any price-driven trend toward these more
limited but standardized systems could reduce demand for the more sophisticated
and customized, but more costly, services provided by the Company. While the
Company believes that it competes effectively on the basis of breadth and depth
of expertise, independence, and response sensitivity and timeliness, there can
be no assurance that the Company will be able to compete successfully in the
future.
INTERNATIONAL SALES AND SERVICES. The Company derives a portion of
its revenue from international projects, and the Company anticipates that this
will continue into the foreseeable future. Inherent in all international
operations are risks of unanticipated changes in host country regulation, shifts
in currency exchange rates, differences in personnel communication and
management protocols, unexpected changes in the international economic and
political environments, shifts in international markets, and difficulties in
protecting proprietary products. There can be no assurance that the Company will
be able, due to these or other reasons, to increase or sustain its current
levels of revenue from international operations, or that such operations will be
or remain profitable. Changes in international business conditions could have an
adverse effect on the Company's business and results of operations.
PROPRIETARY TECHNOLOGY; INTELLECTUAL PROPERTY RIGHTS. The Company
regards as proprietary certain of its developed software applications, and
attempts to protect these with a combination of copyright, trademark and trade
secret laws, employee and third party non-disclosure agreements, and other
methods of protection. As in any attempt to protect proprietary matters, despite
precautions it may be possible for unauthorized third parties to copy certain
portions of the Company's products or reverse engineer or obtain and use
information the
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<PAGE>
Company regards as proprietary. There can be no assurance that the Company's
intellectual property rights can be successfully asserted in the future or will
not be invalidated, circumvented or challenged. In addition, the laws of some
foreign countries do not protect proprietary rights to the same extent as do the
laws of the Unites States. Any misappropriation of the Company's intellectual
property could have an adverse effect on the Company's business and results of
operations. Furthermore, regardless of the degree of caution exercised by the
Company, there can be no assurance that third parties will not assert
infringement claims against the Company in the future with respect to current or
future products. Any such assertion could require the Company to enter into
royalty arrangements or engage in costly litigation.
NEW PRODUCTS AND TECHNOLOGICAL CHANGE. The geographic information
systems industry is characterized by extremely rapid technological change,
evolving industry standards and client expectations, and frequent new product
introductions. These conditions will require continuous expenditures by the
Company on product research, testing and training to sustain the Company's level
of expertise in and reputation for broad based and objective advisory services.
There can be no assurance that the Company will successfully manage the pace of
technological change and new product introduction, or sustain the level of
training and/or additional hiring required to maintain full product fluency in
the marketplace.
BUSINESS PARTNERS. The Company maintains strategic relationships
with substantially all of the major software manufacturers in the geographic
information systems industry. Several of these manufacturers offer similar
services to those of the Company, and may have interests adverse to those of the
Company in bidding for a particular project. There can be no assurance that
these business relationships will be maintained, or that strategic alliances or
business combinations between or among the Company's competitors will not cause
realignments among developers, manufacturers and vendors which are materially
injurious to the Company.
LITIGATION. The Company has established a litigation reserve of
$521,000 in relation to a contract dispute which arose in 1988 under a federal
government contract for the manufacture by the Company of certain aircraft
wiring harness assemblies. While the Company believes that this dispute may
settle and that any settlement amount will not exceed its established reserve,
there can be no assurance that the settlement will occur, will be on terms
favorable to the Company, or that the amounts reserved will be adequate to
satisfy any Company liability under this contract. An unfavorable outcome of
this litigation could have an adverse effect on the Company.
DEPENDENCE UPON KEY AND ADDITIONAL PERSONNEL. The success of the
Company may be significantly dependent upon the efforts of certain key personnel
of the Company, including G. Stephen Carreker, its Chief Executive Officer and
Chairman, John C. Antenucci, its President and founder of PlanGraphics,
Frederick G. Beisser, its Vice President - Finance and Administration, J. Gary
Reed, PlanGraphics' Chief Operating Officer, and other officers. Although the
Company has entered into employment agreements with Messrs. Carreker, Antenucci,
Beisser and Reed, and certain other officers, managers and key technical
personnel, the loss of the services of any of these officers or certain other
key employees could have a
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material adverse effect on the Company. The success of the Company is also
dependent upon its ability to retain existing personnel and to hire and train
additional qualified personnel, including competent engineers and technicians.
There can be no assurance that the Company will be able, for financial reasons
or otherwise, to retain or hire such personnel.
SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS. Of the
8,237,146 shares of Common Stock outstanding as of November 6, 1997, in addition
to the Stockholder Securities offered hereby, approximately 659,970 shares are
"restricted securities," as that term is defined under Rule 144 promulgated
under the Securities Act of 1933, as amended (the "Act"). As of the date of this
Prospectus, 568,680 of such shares are eligible for sale under Rule 144 under
the Act. The Company has also registered for sale to the public approximately
2,169,321 shares of Common Stock, outstanding or issuable upon the exercise of
certain options, issued to consultants, directors or officers, as well as the
shares issuable upon the exercise of options granted under the Company's 1991
Stock Option Plan and 1995 Stock Incentive Plan. The Company also recently sold
1,900 shares of Series A 6% Convertible Redeemable Preferred Stock of the
Company, par value $.001 ("Preferred Stock"), in a series of equity offerings,
1,680 of which shares are still outstanding. Each share of Preferred Stock is or
will be convertible into shares of Common Stock at conversion rates tied to the
lower of the then-current trading price of the Common Stock at the time of
conversion or the trading price at the time of the sale of the Preferred Stock,
subject to adjustment in the event of changes to the Common Stock, a merger, or
the sale of the Company or a substantial portion of its assets. By way of
illustration, at the closing price of the Common Stock on November 6, 1997, the
conversion of all of the outstanding shares of Preferred Stock would result in
the issuance of approximately 1,120,000 shares of Common Stock. The number of
shares issuable upon conversion of the Preferred Stock increases or decreases as
the trading price of the Common Stock decreases or increases, respectively.
Shares of Preferred Stock mandatorily convert on the one year anniversary of
their date of issuance. The holders of the Preferred Stock also have the right
under certain circumstances to require the Company to register the shares of
Common Stock issuable upon conversion of the Preferred Stock. Sales of a
substantial number of shares of Common Stock in the public market following this
offering, or the perception that such sales could occur or the issuance of
shares of Common Stock upon exercise of the Company's outstanding options and
warrants or upon the conversion of the Preferred Stock could adversely affect
the market price of the Common Stock.
AUTHORIZED OR OUTSTANDING OPTIONS AND WARRANTS. As of November 6,
1997, there were outstanding stock options to purchase approximately 3,393,893
shares of Common Stock at exercise prices ranging from $.58 to $4.25 per
share and authorized or outstanding warrants to purchase approximately 1,140,446
shares of Common Stock at exercise prices of $1.00 to $2.25 per share. To the
extent that the outstanding stock options and warrants are exercised, dilution
to the interest of the Company's stockholders will occur. Moreover, the terms
upon which the Company will be able to obtain additional equity capital may be
adversely affected since the holders of the outstanding options and warrants can
be expected to exercise them at a time when the Company would, in all
likelihood, be able to obtain any needed capital
-12-
<PAGE>
on terms more favorable to the Company than those provided in the outstanding
options and warrants.
VOLATILITY OF PRICE OF COMMON STOCK. The market price of the
Company's Common Stock has been, and may in the future be, highly volatile.
Factors such as the Company's operating results and announcements of
technological innovations or new products or contracts by the Company or its
competitors, as well as changes in the geographic information systems industry,
could have a significant impact on the market price of the Company's Common
Stock. Further, in recent years, the securities markets have experienced a high
level of price and volume volatility and the market prices of securities for
many companies have experienced wide fluctuations which have not necessarily
been related to the operating performance of such companies.
THE COMPANY
The Company was organized under the laws of the State of Colorado on
December 8, 1981. During the past three years the Company has been engaged in
the business of the custom design and manufacture of aircraft electronic
interconnect assemblies, principally under contracts for Department of Defense
acquisition programs or for military aircraft maintenance support. The Company's
principal business as of the date of this Prospectus, through its wholly-owned
subsidiary, PlanGraphics, Inc., is the development and sale of geographic
information products for local, state and foreign governments, gas, electric and
telephone utilities, and other commercial entities.
DCX, Inc. is located at 1597 Cole Boulevard, Suite 300, Golden,
Colorado 80401 and its telephone number is 303-274-8708.
USE OF PROCEEDS
If all of the warrants are exercised, the Company will receive gross
proceeds of approximately $1,436,593. There can be no assurance that any of
these warrants will be exercised. The Company plans to use any proceeds received
from the exercise of these warrants for working capital and general corporate
purposes, and may use a portion of such proceeds to repay outstanding
indebtedness. In addition, the Company may, if and when the opportunity arises,
use a portion of any such proceeds, together with the issuance of equity or debt
securities, to acquire companies which the Company believes are compatible with
its business. The Company will not receive any of the proceeds from the sale by
the Selling Stockholders of the Common Stock offered hereby.
The above applications reflect management's current plans and may be
changed to reflect various factors, including arrangements with other companies
and competitive developments, some of which are beyond the control of
management. Pending application, any
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<PAGE>
proceeds received upon the exercise of any of these warrants will be temporarily
invested in high-quality, interest-bearing securities and in other investments
which the Company deems appropriate.
-14-
<PAGE>
SELLING STOCKHOLDERS
The following table shows the names of the Selling Stockholders and
the number of Stockholder Securities owned beneficially by each of them, or
their nominees, as of November 6, 1997, and the number of Stockholder Securities
which may be offered pursuant to this Prospectus. This information is based on
Company records, or information provided by the Selling Stockholders or their
representatives. Except as set forth in footnote below, shares beneficially
owned by Selling Stockholders prior to this offering consist entirely of shares
obtainable upon exercise of options or the vesting of performance shares under
various employee benefit plans of Company, and may or may not be obtainable by
the applicable Selling Stockholder within 60 days following the date of this
Prospectus. Specific terms of such options and performance shares are set forth
in footnote below as to officers of the Company. Because the Selling
Stockholders may offer all, some or none of the Stockholder Securities which
they hold, no estimate can be given as to the number of Stockholder Securities
or the percentage of the Company's outstanding Common Stock that will be held by
the Selling Stockholders upon termination of such offering. See "Sale of
Securities."
<TABLE>
<CAPTION>
TOTAL OF SHARES SHARES OFFERED FOR
BENEFICIALLY OWNED STOCKHOLDER'S TOTAL OF SHARES BENEFICIALLY
SELLING STOCKHOLDERS PRIOR TO OFFERING ACCOUNT OWNED AFTER OFFERING
- ------------------------------ ------------------ ------------------ ------------------------------
SHARES SHARES NUMBER PERCENTAGE
------------------ ------------------ ---------- ---------------
<S> <C> <C> <C> <C>
John C. Antenucci/1/ 1,711,475 1,186,475 525,000 6.0%
Hugh N. Archer 18,357 18,357 * *
Black & Veatch Holding Company/2/ 608,713 608,713 * *
Scott E. Boocher 93,193 93,193 * *
William G. Brooner 10,415 10,415 * *
Kaye N. Brothers 1,751 1,139 612 *
Vickie C. Bunker 3,758 3,758 * *
James R. Cannistra 25,114 18,627 6,487 *
Charles A. Cmeyla 38,893 33,875 5,018 *
Dwight Coppock 46,909 46,909 * *
Peter L. Croswell 124,450 71,984 52,466 *
Stu Davis 12,238 12,238 * *
Patricia A. Edelen 2,754 2,142 612 *
Robert W. Finkle 53,396 1,848 51,548 *
Maurice E. Foley 32,749 32,749 * *
Rich Goodden 5,789 771 5,018 *
Al Hanks 12,238 12,238 * *
Marina Havan-Orumieh 28,219 771 27,448 *
Edward T. Hedges 6,878 6,878 * *
Charles D. Howard 67,970 67,970 * *
Michael J. Kevany/3/ 259,287 96,191 163,096 1.9%
Dave Koehler 392 392 * *
Rosanne Kruzich 4,284 4,284 * *
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<PAGE>
TOTAL OF SHARES SHARES OFFERED FOR
BENEFICIALLY OWNED STOCKHOLDER'S TOTAL OF SHARES BENEFICIALLY
SELLING STOCKHOLDERS PRIOR TO OFFERING ACCOUNT OWNED AFTER OFFERING
- ------------------------------ ------------------ ------------------ ------------------------------
SHARES SHARES NUMBER PERCENTAGE
------------------ ------------------ ---------- ---------------
Dennis M. Kunkle 84,920 83,696 1,224 *
Jeffrey M. Laird 3,060 3,060 * *
Thomas Lenzen 1,530 1,530 * *
Minna Li 45,746 4,198 41,548 *
Anna L. Metcalf 51,487 1,836 49,651 *
Margaret T. Norman 612 612 * *
Quarterdeck Investment Partners, Inc./4/ 152,975 152,975 * *
Cindy Popolillo 27,987 1,273 26,714 *
Amy J. Purves 14,295 8,053 6,242 *
Joyce Rector/5/ 178,446 73,428 105,018 1.3%
J. Gary Reed/6/ 350,961 943 350,018 4.1%
Paul Reisner 392 392 * *
David A. Riddle 612 612 * *
Leann S. Rodgers 7,245 6,633 612 *
Ralph Silver 6,119 6,119 * *
Soberekon K. Simon-Ogan 4,284 4,284 * *
J. Woodson Smith 31,548 918 30,630 *
Ann F. Wingrove 15,298 15,298 * *
First Capital Partners/7/ 100,000 100,000 * *
W. Terrance Schreier/8/ 439,211 32,895 406,316 4.7%
Copeland Consulting Group, Inc./8/ 439,211 32,895 406,316 4.7%
</TABLE>
* Reflects less than one percent (1%) of the 8,237,146 outstanding shares of
Common Stock as of the date of this Prospectus.
1 President of PlanGraphics, Inc., and President and Vice Chairman of the
Board of Directors of the Company. Includes options for 300,000 shares at
$1.75 per share exercisable within 60 days following the date of this
Prospectus, and up to 225,000 performance shares which vest more than 60
days of the date of this Prospectus.
2 Black & Veatch Holding Company is a strategic partner of PlanGraphics,
Inc., and until September 22, 1997, owned 18% of the outstanding capital
stock of PlanGraphics, Inc.
3 Senior Vice President of PlanGraphics, Inc. Includes options for 50,000
shares at $1.75 per share exercisable within 60 days of the date of this
Prospectus, and options for 3,060 shares at $.58 per share, 10,036 shares
at $1.00 per share and 100,000 shares at $1.75 per share exercisable more
than 60 days of the date of this Prospectus.
4 Quarterdeck Investment Partners, Inc. has provided investor communications
and development services for PlanGraphics, Inc.
5 Senior Vice President for Human Relations and Resources of PlanGraphics,
Inc. Includes options for 40,000 shares at $1.75 per share exercisable
within 60 days following the date of this Prospectus, and options for up to
60,000 shares at $1.75 per share and options for 5,018 shares at $1.00 per
share not exercisable within 60 days of the date of this Prospectus.
6 Chief Operating Officer of PlanGraphics, Inc. and a Director of the
Company. Includes options for 200,000 shares at $1.75 per share exercisable
within 60 days following the date of this Prospectus, and options for 5,018
shares at $1.00 per share and up to 145,000 performance shares, all of
which vest more than 60 days of the date of this Prospectus.
7 First Capital Partners has been a financial advisor to DCX, Inc.
8 Total Shares figures include shares registered hereunder obtainable upon
the exercise of warrants issued to Transition Partners Limited as to W.
Terrance Schreier, or to Copeland Consulting Group, Inc., respectively.
Transition Partners Limited, of which W. Terrance Schreier is the
principal, was retained by the Company on January 15, 1997 to provide
management and financial advisory services to the Company, and assisted
the Company in its acquisition of PlanGraphics, Inc. Gene R. Copeland, a
Managing Director of Transition Partners Limited, is the principal of
Copeland Consulting Group, Inc.
-16-
<PAGE>
SALE OF SHARES
The sale of shares by the Selling Stockholders may be effected from
time to time in transactions (which may include block transactions) on the
Nasdaq SmallCap Market, in negotiated transactions, or a combination of such
methods of sale at fixed prices which may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, or at negotiated prices. The Selling Stockholders may effect such
transactions by selling Stockholder Securities to or through broker-dealers, and
such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders and/or the purchasers
of Stockholder Securities for whom such broker-dealers may act as agent or to
whom they sell as principal or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). The Selling
Stockholders and any broker-dealers that act in connection with the sale of the
Stockholder Securities hereunder might be deemed to be "underwriters" within the
meaning of Section 2(11) of the Act and any commissions received by them and any
profit on the resale of Stockholder Securities as principals might be deemed to
be underwriting discounts and commissions under the Act. The Company has agreed
to indemnify certain of the Selling Stockholders against certain liabilities,
including liabilities under the Act.
Pursuant to its agreement with certain of the Selling Stockholders,
the Company is obligated to maintain the effectiveness of the Registration
Statement of which this Prospectus forms a part (the "Registration Statement").
Pursuant to this agreement, the Offering contemplated hereby will terminate with
respect to the Stockholder Securities upon the earlier of (i) the date all of
the Stockholder Securities are sold by the Selling Stockholders; or (ii) one
year from the effective date of the Registration Statement of which this
Prospectus forms a part.
To the extent required by applicable law, this Prospectus will be
supplemented to summarize the terms of any sales through dealers, together with
any discounts, commissions or concessions allowed to such dealers in connection
therewith. No sale or distributions other than as described herein may be
effected until after this Prospectus shall have been appropriately amended or
supplemented.
LEGAL MATTERS
The legality of the Stockholder Securities was passed upon for the
Company by Davis, Graham & Stubbs LLP, Denver, Colorado.
EXPERTS
The consolidated financial statements of DCX, Inc. and subsidiaries
as of September 30, 1996 and 1995, have been incorporated by reference herein
in reliance upon the
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<PAGE>
report of BDO Seidman, LLP, independent certified public accountants, and upon
the authority of said firm as experts in accounting and auditing.
The financial statements of PlanGraphics, Inc. as of December 31,
1995 and the nine-month fiscal year ended September 30, 1996, incorporated by
reference herein, have been incorporated by reference herein in reliance upon
the report of Eskew & Gresham, PSC, independent certified public accountants,
and upon the authority of said firm as experts in accounting and auditing.
-18-
<PAGE>
DCX, INC.
2,863,857 SHARES OF COMMON STOCK
OFFERED BY THE SELLING STOCKHOLDERS
1,140,446 SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF CERTAIN WARRANTS
----------------
PROSPECTUS
----------------
November 7, 1997
No person is authorized to give any information or to make any
representations not contained in this Prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell, or a
solicitation of any person in any jurisdiction where such an offer or
solicitation would be unlawful. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any implication that
the information contained herein is correct as of any time subsequent to the
date hereof.
-19-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table shows all expenses of the issuance and distribution of
the securities offered hereby:
SEC Registration Fee...................................... $ 1,682.85
State Qualification Expenses.............................. $ 5,000
Printing Expenses......................................... $ 100
Legal Fees and Expenses................................... $ 13,000
Accountants' Fees and Expenses............................ $ 5,000
Transfer Agent and Registrar Fees......................... $ 200
Miscellaneous Expenses.................................... $ 1,000
Total................................................... $25,982.85
All amounts listed above, except for the SEC registration fee, are estimates
and none are being borne by the Selling Stockholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VII of the Articles of Incorporation of the Company provides as
follows:
"The Corporation shall indemnify any and all of its directors,
officers, employees, authorized agents or former directors or officers or
any person who may have served at its request as a director or officer of
another corporation in which it owns shares of capital stock or of which it
is a creditor, against expenses actually and necessarily incurred by them to
the fullest extent permitted under Colorado Corporate Code, in connection
with the defense of any action, suit or proceeding in which they or any of
them, are made parties, or a party, by reason of being or having been
directors or officers of the Corporation, or of such other corporation,
except in relation to matters to which any such director or officer or
former director or person shall be adjudged in such action, suit or
proceeding to be liable for gross negligence or willful misconduct in the
performance of duty. Such indemnification shall not be deemed exclusive of
any other rights to which those indemnified may be entitled, under any
By-Law agreement, vote of shareholders or otherwise.
In addition no officer, director, employee or authorized agent shall
be personally liable for any injury to person or property arising out of a
tort committed by an employee unless such officer or director was personally
involved in the situation giving rise to the litigation or unless such
officer or director committed a criminal offense. The protection afforded
hereby shall not restrict other common law protection and rights that an
officer or director may have. This Article shall not restrict the
Corporation's right to eliminate or limit the personal liability of a
director to the Corporation or to its shareholders for monetary damages for
breach of fiduciary duty as a director, and the personal liability of
II-1
<PAGE>
directors to the Corporation and to us shareholders for monetary damages
shall be eliminated or limited, to the full extent permitted by the Colorado
Corporation Code, except for monetary damages for any breach of the
director's duty of loyalty to the Corporation or to its shareholders, acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, acts specified in Section 7-5-114 of the Colorado
Corporation Code, or any transaction from which the director derived an
improper personal benefit. Nor shall the liability of a director of the
Corporation be eliminated or limited to the Corporation or to its
shareholders for monetary damages for any act or omission occurring prior to
the effective date of this Article."
Article VI of the Bylaws of the Company provides as follows:
"Each Director and Officer of this Corporation, and each person who
shall serve at its request as a Director or Officer of another corporation
in which this Corporation owns shares of capital stock or of which it is a
creditor, whether or not then in office, and his personal representatives,
shall be indemnified by the Corporation against all costs and expenses
actually and necessarily incurred by him in connection with the defense of
any action, suit or proceeding in which he may be involved or to which he
may be made a party by reason of his being or having been such Director or
Officer, except in relation to matters as to which he shall be finally
adjudged in such action, suit or proceeding to be liable for negligence of
misconduct in the performance of duty. Such costs and expenses shall include
amounts reasonably paid in settlement for the purpose of curtailing the
costs of litigation, but only if the Corporation is advised in writing by
its counsel that in his opinion the person indemnified did not commit such
negligence or misconduct. The foregoing right of indemnification shall not
be exclusive of other rights to which he may be entitled as a matter of law
or by agreement."
Insofar as indemnification for liabilities arising under the Act may be
permitted to Directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a Director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-2
<PAGE>
ITEM 16. EXHIBITS.
Exhibits
4.1 Amended and Restated Articles of Incorporation./1/
4.2 Articles of Amendment to the Articles of Incorporation./2/
4.3 Specimen Stock Certificate./3/
4.4 Warrant, dated January 15, 1997 issued to Transition Partners
Limited.
4.5 Warrant, dated October 15, 1997, issued to Transition Partners
Limited.
4.6 Letter Agreement between Transition Partners, Ltd. and the
Company, dated January 9, 1997.
4.7 Warrant, dated January 15, 1997 issued to Copeland Consulting
Group, Inc.
4.8 Warrant, dated October 15, 1997, issued to Copeland Consulting
Group, Inc.
4.9 Warrant, dated June 19, 1997 issued to Spencer Edwards, Inc.
4.10 Warrant, dated November 8, 1996 issued to Coretech, Ltd.
4.11 Warrant, dated October 10, 1997, issued to SKB Corporation.
4.12 Warrant, dated October 24, 1997, issued to Gerald Alexander.
5.1 Opinion and Consent of Davis, Graham & Stubbs LLP./4/
23.1 Consent of Davis, Graham & Stubbs LLP - See Exhibit 5.1./4/
23.2 Consent of BDO Seidman, LLP.
23.3 Consent of Eskew & Gresham, PSC.
24 Power of Attorney to Sign Registration Statement. See page II-5.
- --------------------
1 Filed as an exhibit to the Company's definitive Proxy Statement, dated May
3, 1991 and incorporated herein by reference.
2 Filed as an exhibit to the Company's Current Report on Form 8-K dated
November 12, 1996, and incorporated herein by reference.
3 Filed as an exhibit to the Company's Registration Statement on Form S-18
(Registration No. 33-1484), as filed with the Commission on November 12,
1985, and incorporated herein by reference.
4 To be filed by amendment.
II-3
<PAGE>
ITEM 17. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement to include any material information with respect to
the plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement; (2)
that, for the purpose of determining any liability under the Securities Act of
1933 (the "Act"), each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and (3) to remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the Registration Statement shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Golden, State of Colorado, on the 7th day of
November, 1997.
DCX, INC.
By: Fred Beisser
----------------------------------------
Frederick G. Beisser
Vice President - Finance and
Administration, Secretary and Treasurer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints G. Stephen Carreker and Frederick G.
Beisser and each or any of them, his or her true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him or her in his
or her name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agents, or any of them, or their or his substitutes or
substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
G. Stephen Carreker Chief Executive Officer, and November 7, 1997
- ---------------------------- Chairman of the Board of
G. Stephen Carreker Directors
John C. Antenucci President and Vice-Chairman November 7, 1997
- ---------------------------- of the Board of Directors
John C. Antenucci
Fred Beisser Vice President - Finance and November 7, 1997
- ---------------------------- Administration, Secretary and
Frederick G. Beisser Treasurer and a Director
(Principal Financial and
Accounting Officer)
II-5
<PAGE>
Jeanne M. Anderson
- ---------------------------- Director November 7, 1997
Jeanne M. Anderson
J. Gary Reed
- ---------------------------- Director November 7, 1997
J. Gary Reed
Ray O'Mara
- ---------------------------- Director November 7, 1997
Raymond E. O'Mara
II-6
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE
4.1 Amended and Restated Articles of Incorporation./1/
4.2 Articles of Amendment to the Articles of Incorporation./2/
4.3 Specimen Stock Certificate./3/
4.4 Warrant, dated January 15, 1997 issued to Transition Partners
Limited.
4.5 Warrant, dated October 15, 1997, issued to Transition Partners
Limited.
4.6 Letter Agreement between Transition Partners, Ltd. and the
Company, dated January 9, 1997.
4.7 Warrant, dated January 15, 1997 issued to Copeland Consulting
Group, Inc.
4.8 Warrant, dated October 15, 1997, issued to Copeland Consulting
Group, Inc.
4.9 Warrant, dated June 19, 1997 issued to Spencer Edwards, Inc.
4.10 Warrant, dated November 8, 1996 issued to Coretech, Ltd.
4.11 Warrant, dated October 10,1997, issued to SKB Corporation.
4.12 Warrant, dated October 24, 1997, issued to Gerald Alexander.
5.1 Opinion and Consent of Davis, Graham & Stubbs LLP./4/
23.1 Consent of Davis, Graham & Stubbs LLP - See Exhibit 5.1./4/
23.2 Consent of BDO Seidman, LLP.
23.3 Consent of Eskew & Gresham, PSC.
24 Power of Attorney to Sign Registration Statement. See page II-5.
- --------------------
1 Filed as an exhibit to the Company's definitive Proxy Statement, dated May
3, 1991 and incorporated herein by reference.
2 Filed as an exhibit to the Company's Current Report on Form 8-K dated
November 12, 1996, and incorporated herein by reference.
3 Filed as an exhibit to the Company's Registration Statement on Form S-18
(Registration No. 33-1484), as filed with the Commission on November 12,
1985, and incorporated herein by reference.
4 To be filed by amendment.
II-7
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND HAS BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO
THE DISTRIBUTION THEREOF, AND THIS WARRANT MAY NOT BE SOLD OR TRANSFERRED UNLESS
THERE IS AN EFFECTIVE REGISTRATION STATEMENT COVERING IT OR THE COMPANY RECEIVES
AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) FROM THE TRANSFEROR
REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
No. Warrant to Purchase 111,260 Shares
---------------- of Common Stock (subject to adjustment)
Date: January 15, 1997
WARRANT
TO PURCHASE COMMON STOCK OF DCX, INC.
This certifies that, in consideration of value heretofore received by DCX,
INC., a Colorado corporation (the "Company") receipt of which is hereby
acknowledged, TRANSITION PARTNERS, LIMITED, 1942 Broadway, Suite 203, Boulder,
CO 80302 ("Holder") is entitled to subscribe for and purchase up to 111,260
shares of fully paid and nonassessable Common Stock of the Company, at the price
of $1.00 per share, as adjusted pursuant to Paragraph 4 hereof (the "Warrant
Price"), subject to the provisions and upon the terms and conditions hereinafter
set forth.
As used herein, the term "Common Stock" shall mean the Company's presently
authorized Common Stock and any stock into which such Common Stock may hereafter
be exchanged.
1. TERM.
The purchase right represented by this Warrant is exercisable, in whole or
in part at any time following the date hereof until JANUARY 14, 2002.
2. METHOD OF EXERCISE; PAYMENT: ISSUANCE OF NEW WARRANT.
Subject to paragraph I hereof, the purchase right represented by this
Warrant may be exercised by the holder hereof, in whole or in part, by the
surrender of this Warrant (with the notice of exercise form attached hereto as
Exhibit 1 duly executed) at the principal office of the Company and by the
payment to the Company, by either: (a) a check, of an amount equal to the then
applicable Warrant Price per share multiplied by the number of shares of common
stock then being purchased; or (b) that number of shares of common stock of the
Company having a fair market value equal to the then applicable warrant price
per share multiplied by the number of shares of common stock then being
purchased. In the event of any exercise of the rights represented by this
Warrant, certificates for the shares of stock so purchased shall be delivered to
the Holder hereof within five (5) business days and, unless this Warrant has
been fully exercised or expired, a new Warrant representing the portion of the
shares, if any, with respect to which this Warrant shall not then have been
exercised shall also be issued to the Holder hereof within such reasonable time.
3. STOCK FULLY PAID, RESERVATION OF SHARES.
All Common Stock which may be issued upon the exercise of the rights
represented by this Warrant ("Warrant Stock") will, upon issuance, be fully paid
and nonassessable, and free from all taxes, liens and charges with respect to
the issue thereof. During the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized, and
reserved for the purpose of the issue upon exercise of the purchase rights
evidenced by this Warrant, a sufficient number of shares of its Common Stock to
provide for the exercise of the rights represented by this Warrant.
<PAGE>
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES.
If there shall be any change described in sub-paragraphs (a), (b) or (c)
below, the aggregate Warrant Price shall remain unchanged but the number of
shares covered by this Warrant shall in each instance be adjusted as follows:
a. If a share dividend is declared on the Common Stock of the Company,
the number of shares of Common Stock subject to this Warrant shall be increased
by the number of shares which would have been issuable to the Holder if such
Holder had exercised this Warrant immediately prior to the record date related
to the declaration and payment of such share dividend;
b. If an increase or decrease is effected in the number of outstanding
shares of Common Stock by reason of subdivision or combination of such shares,
the number of shares of Common Stock subject to this Warrant shall equal the
number of shares which would have been held by the Holder after consummation of
such combination or subdivision if the Holder had exercised this Warrant
immediately prior to the record date related to such subdivision or combination
and the Holder held no other shares of Common Stock other than those deemed
issued upon exercise of this Warrant; and
c. In case of a capital reorganization, merger (except a merger in
which the Company is the surviving corporation), or the sale of all or
substantially all of the properties and assets of the Company (each of the
foregoing is sometimes hereinafter referred to as a "Reorganization"), the
securities or any other property to be received upon exercise of this Warrant
shall be the securities and other property which would have been held by the
Holder after consummation of such Reorganization if the Holder had exercised
this Warrant immediately prior to the record date related to such Reorganization
and the Holder held no other shares of Common Stock other than those deemed
issued upon exercise of this Warrant. Notwithstanding anything herein to the
contrary, in the case of a Reorganization which qualifies for adjustment under
this subparagraph (c), the Holder must exercise this Warrant (or agree to
exercise this Warrant) within ninety (90) days after written notice of the
execution of the definitive agreement with the acquiror is delivered by the
Company or the acquiror to the Holder.
5. NOTICE OF ADJUSTMENTS.
Whenever any Warrant Price shall be adjusted pursuant to Paragraph 4
hereof, the Company shall issue a certificate signed by its chief financial
officer setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was
calculated, and the Warrant Price or Prices after giving effect to such
adjustment, and shall cause copies of such certificate to be mailed (by first
class mail, postage prepaid) to the Holder of this Warrant at the address
specified in Paragraph 10(c) hereof, or at any address provided to the Company
in writing by the Holder of this Warrant.
6. FRACTIONAL SHARES.
No fractional shares of Common Stock will be issued in connection with any
exercise hereunder, but in lieu of such fractional shares the Company shall make
a cash payment therefor upon the basis of the Warrant Price then in effect.
<PAGE>
7. COMPLIANCE WITH SECURITIES ACT-, NON-TRANSFERABILITY OF WARRANT-,
DISPOSITION OF SHARES OF COMMON STOCK.
COMPLIANCE WITH SECURITIES ACT. The Holder of this Warrant, by acceptance
hereof, agrees that this Warrant and the shares of Common Stock to be issued
upon exercise hereof are being acquired for investment and that it will not
offer, sell or otherwise dispose of this Warrant or any shares of Common Stock
to be issued upon exercise hereof except under circumstances which will not
result in a violation of the Securities Act of 1933, as amended (the "Act").
Upon exercise of this Warrant, the Holder hereof shall, if requested by the
Company, confirm in writing, in a form satisfactory to the Company, that the
shares of Common Stock so purchased are being acquired for investment and not
with a view toward distribution or resale. This Warrant and all shares of Common
Stock issued upon exercise of this Warrant (unless registered under the Act)
shall be stamped or imprinted with a legend substantially in the following form:
"THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
THE REGISTRATION PROVISIONS OF SUCH ACT HAVE BEEN COMPLIED WITH OR UNLESS
THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT THE PROPOSED TRANSACTION WILL NOT VIOLATE FEDERAL OR STATE SECURITIES
LAWS."
8. REGISTRATION OF SHARES OF COMMON STOCK UNDERLYING WARRANTS.
8.1 REGISTRATION. The Company shall use reasonable efforts to prepare
and file a registration statement (the "statement") under the Act, to the extent
the Company can qualify to file such a statement, and thereafter continue to use
its best efforts to make effective, a registration statement covering the shares
of Warrant Stock issued or issuable pursuant to the Warrants requested to be
sold by such Holders (Holders may only make the demand one time during the term
of the Warrant), and in connection therewith shall advise the persons entitled
thereto of their rights under Section 8 hereof.
8.2 NOTICE. In connection with the filing of a registration statement
pursuant to this Section, the Company shall:
(a) promptly notify such Holders as to the anticipated filing thereof
and of all amendments thereto filed prior to the effective date of said
registration statement which notice briefly describes the Holders' rights under
this Section 8;
(b) use its best efforts to include in such registration (and any
related filing or qualification under applicable blue sky laws), and in any
underwriting involved therein, all the shares of Warrant Stock specified in a
written request or requests, made by any Holder and received by the Company
within twenty (20) days after the written notice from the Company described in
clause (a) above is mailed or delivered by the Company. Such written request may
specify all or a part of a Holder's shares of Warrant Stock.
(c) UNDERWRITING. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as part of the written notice given pursuant
to clause (a). In such event, the right of any Holder to registration pursuant
to this Section 8 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's shares of Warrant Stock in the
underwriting to the extent provided herein. All such Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and the other holders of securities of the Company with registration
rights to participate therein distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected by the Company.
<PAGE>
(d) notify such Holders promptly after it shall have -received notice
of the time when the registration statement becomes effective or any supplement
to any prospectus forming a part of the registration statement has been filed;
(e) prepare and file without expense to such Holders any necessary
amendment or supplement to such registration statement or prospectus as may be
necessary to comply with Section 10(a)(3) of the Act or advisable in connection
with the proposed distribution of the securities by such Holders;
(f) take all reasonable steps to qualify the shares of Warrant Stock
for sale under the securities or blue sky laws of states as such Holders may
designate in writing and to register or obtain the approval of any federal or
state authority which may be required in connection with the proposed
distribution, except, in each case, in jurisdictions in which the Company must
either qualify to do business or file a general consent to service of process as
a condition to the qualification of such securities;
(g) notify such Holders of any stop order suspending the effectiveness
of the registration statement and use its reasonable best efforts to remove such
stop order;
(h) use its best efforts to keep such registration statement and
prospectus effective for a period of five (5) years after its effective date;
and
(i) furnish to such Holders as soon as available, copies of any such
registration statement and each preliminary or final prospectus and any
supplement or amendment required to be prepared pursuant to the foregoing
provisions of this Section 8, all in such quantities as such Holders may from
time to time reasonably request.
9. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. Subject to the
provisions of Section 7 hereof, this Warrant is exchangeable, without expense,
at the option of the Holder, upon presentation and surrender hereof to the
Company or at the office of its stock transfer agent, if any, for other warrants
of different denominations, entitling the Holder or Holders thereof to purchase
in the aggregate the same number of shares of Warrant Stock purchasable
hereunder. Upon surrender of this Warrant to the Company or at the office of its
stock transfer agent, if any, with the Assignment Form annexed hereto duly
executed and funds sufficient to pay any transfer tax, 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 promptly be
canceled. This Warrant may be divided or combined with other Warrants that carry
the same rights upon presentation hereof at the office of the Company or at the
office of its stock transfer agent, if any, together with a written notice
specifying the names and denominations in which new Warrants are to be issued
and signed by the Holder hereof.
10. MISCELLANEOUS.
(a) NO RIGHTS AS SHAREHOLDER. No Holder of the Warrant or Warrants
shall be entitled to vote or receive dividends or be deemed the Holder of Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder of this Warrant, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger, conveyance, or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until the Warrant or Warrants shall have been
exercised and the Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein.
<PAGE>
(b) REPLACEMENT. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant and, in
the case of loss. theft or destruction, on delivery of any indemnity agreement
or bond reasonably satisfactory in form and amount to the Company or, in the
case of mutilation, on surrender and cancellation of this Warrant, the Company,
at its expense, will execute and deliver. in lieu of this Warrant, a new Warrant
of like tenor.
(c) NOTICE. Any notice given to either party under this Agreement
shall be deemed to be given three (3) days after mailing, postage prepaid,
addressed to such parry at the address as such party may provide to the other.
(d) NO IMPAIRMENT. The Company will not, by amendment of its
Certificate of Incorporation 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 to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying, out of all the provisions in this
Warrant.
(e) GOVERNING Law. This Warrant shall be governed by and construed
under the laws of the State of Colorado without regard to principles of
conflicts of laws. Any action or proceeding brought by the Holder or the Company
against the other arising out of or related to this Warrant shall be brought in
a State or Federal Court of competent jurisdiction located in Denver, Colorado
and the Holder and the Company hereby submit to the jurisdiction of such courts
for the purposes of any such action or proceeding.
(f) The Company shall at all times during the term of this Warrant
reserve and keep available such number of shares of its Common Stock as will be
sufficient to satisfy the requirements of this Warrant.
(g) This Warrant shall be binding upon the Company's successors and
assigns.
(h) The Holder agrees that he will comply with all applicable laws,
rules and regulations of all Federal and State securities regulators including
but not limited to the Securities and Exchange Commission, the National
Association of Securities Dealers and applicable state securities regulators
with respect to disclosure, filings and any other requirements resulting in any
way from the issuance of this Warrant.
IN WITNESS WHEREOF, the parties have signed this Warrant.
DATED: As of May 5, 1997
DCX INC.
/s/ Stephen Carreker
--------------------------------------------
Stephen Carreker, President and CEO
HOLDER:
TRANSITION PARTNERS, LIMITED
--------------------------------------------
W. Terrance Schreier, President
<PAGE>
EXHIBIT 1
NOTICE OF EXERCISE
TO: DCX INC.
1. The undersigned hereby elects to purchase shares of Common
Stock of DCX, INC. pursuant to the terms of the attached Warrant, and tenders
herewith payment of the purchase price of such shares in full.
2. Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
------------------------------------
(Name)
------------------------------------
------------------------------------
(Address)
3. The undersigned represents that the aforesaid shares of Common Stock
are being acquired for the account of the undersigned for investment and not
with a view to, or for resale in connection with, the distribution thereof and
that the undersigned has no present intention of distributing or reselling such
shares. In support thereof, the undersigned agrees to execute an Investment
Representation Statement in the form attached as Exhibit A.
<PAGE>
EXHIBIT A
INVESTMENT REPRESENTATION STATEMENT
TO: DCX, INC.
With respect to the shares of Common Stock ("Shares") of DCX,
----------------
INC. ("Company") which the undersigned ("Purchaser") has purchased from the
Company today, the Purchaser hereby represents and warrants as follows:
1) The Purchaser acknowledges that he has received no formal prospectus or
offer in memorandum describing the business and operations of the Company. He
has, however, by virtue of his relationship with the Company, been given access
to all information that he believes is material to his decision to purchase the
Shares. The Purchaser has had the opportunity to ask questions of, and receive
answers from, representatives of the Company concerning its business operations.
Any questions raised by the Purchaser have been answered to his satisfaction.
2) The Shares are being acquired by the Purchaser for his account, for
investment purposes only, and not with a view to the distribution or resale
thereof.
3) No representations or promises have been made concerning the
marketability or value of the Shares. The Purchaser understands that there is
currently no market for the transfer of the Shares. The Purchaser further
acknowledges that, because the Shares have not been registered under the
Securities Act of 1933, or applicable state securities laws and cannot be resold
unless and cannot be resold unless they are subsequently registered under said
Act or applicable state securities laws, or an exemption from registration is
available, the Purchaser must continue to bear the economic risk of his
investment in the Shares for an indefinite period of time. Specifically, the
Purchaser agrees that the Shares may not be transferred until the Company has
received an opinion of counsel reasonably satisfactory to it that the proposed
transfer will not violate federal or state securities laws. The Company has not
agreed or represented to the Purchaser that the Shares will be purchased or
redeemed from the Purchaser at any time in the future. The Purchaser further
understands that a notation will be made on the appropriate records of the
Company and on the stock certificate representing the Shares so that the
transfers of Shares will not be effected on those records without compliance
with the restrictions referred to above.
Date:
---------------------
------------------------------
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND HAS BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO
THE DISTRIBUTION THEREOF, AND THIS WARRANT MAY NOT BE SOLD OR TRANSFERRED UNLESS
THERE IS AN EFFECTIVE REGISTRATION STATEMENT COVERING IT OR THE COMPANY RECEIVES
AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) FROM THE TRANSFEROR
REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
No. Warrant to Purchase 295,056 Shares
---------------- of Common Stock (subject to adjustment)
Date: October 15, 1997
WARRANT
TO PURCHASE COMMON STOCK OF DCX, INC.
This certifies that, in consideration of value heretofore received by DCX,
INC., a Colorado corporation (the "Company") receipt of which is hereby
acknowledged, TRANSITION PARTNERS, LIMITED, 1942 Broadway, Suite 203, Boulder,
CO 80302 ("Holder") is entitled to subscribe for and purchase up to 295,056
shares of fully paid and nonassessable Common Stock of the Company, at the price
of $1.00 per share, as adjusted pursuant to Paragraph 4 hereof (the "Warrant
Price"), subject to the provisions and upon the terms and conditions hereinafter
set forth.
As used herein, the term "Common Stock" shall mean the Company's presently
authorized Common Stock and any stock into which such Common Stock may hereafter
be exchanged.
1. TERM.
The purchase right represented by this Warrant is exercisable, in whole or
in part at any time following the date hereof until JANUARY 14, 2002.
2. METHOD OF EXERCISE; PAYMENT: ISSUANCE OF NEW WARRANT.
Subject to paragraph I hereof, the purchase right represented by this
Warrant may be exercised by the holder hereof, in whole or in part, by the
surrender of this Warrant (with the notice of exercise form attached hereto as
Exhibit 1 duly executed) at the principal office of the Company and by the
payment to the Company, by either: (a) a check, of an amount equal to the then
applicable Warrant Price per share multiplied by the number of shares of common
stock then being purchased; or (b) that number of shares of common stock of the
Company having a fair market value equal to the then applicable warrant price
per share multiplied by the number of shares of common stock then being
purchased. In the event of any exercise of the rights represented by this
Warrant, certificates for the shares of stock so purchased shall be delivered to
the Holder hereof within five (5) business days and, unless this Warrant has
been fully exercised or expired, a new Warrant representing the portion of the
shares, if any, with respect to which this Warrant shall not then have been
exercised shall also be issued to the Holder hereof within such reasonable time.
3. STOCK FULLY PAID, RESERVATION OF SHARES.
All Common Stock which may be issued upon the exercise of the rights
represented by this Warrant ("Warrant Stock") will, upon issuance, be fully paid
and nonassessable, and free from all taxes, liens and charges with respect to
the issue thereof. During the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized, and
reserved for the purpose of the issue upon exercise of the purchase rights
evidenced by this Warrant, a sufficient number of shares of its Common Stock to
provide for the exercise of the rights represented by this Warrant.
<PAGE>
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES.
If there shall be any change described in sub-paragraphs (a), (b) or (c)
below, the aggregate Warrant Price shall remain unchanged but the number of
shares covered by this Warrant shall in each instance be adjusted as follows:
a. If a share dividend is declared on the Common Stock of the Company,
the number of shares of Common Stock subject to this Warrant shall be increased
by the number of shares which would have been issuable to the Holder if such
Holder had exercised this Warrant immediately prior to the record date related
to the declaration and payment of such share dividend;
b. If an increase or decrease is effected in the number of outstanding
shares of Common Stock by reason of subdivision or combination of such shares,
the number of shares of Common Stock subject to this Warrant shall equal the
number of shares which would have been held by the Holder after consummation of
such combination or subdivision if the Holder had exercised this Warrant
immediately prior to the record date related to such subdivision or combination
and the Holder held no other shares of Common Stock other than those deemed
issued upon exercise of this Warrant; and
c. In case of a capital reorganization, merger (except a merger in
which the Company is the surviving corporation), or the sale of all or
substantially all of the properties and assets of the Company (each of the
foregoing is sometimes hereinafter referred to as a "Reorganization"), the
securities or any other property to be received upon exercise of this Warrant
shall be the securities and other property which would have been held by the
Holder after consummation of such Reorganization if the Holder had exercised
this Warrant immediately prior to the record date related to such Reorganization
and the Holder held no other shares of Common Stock other than those deemed
issued upon exercise of this Warrant. Notwithstanding anything herein to the
contrary, in the case of a Reorganization which qualifies for adjustment under
this subparagraph (c), the Holder must exercise this Warrant (or agree to
exercise this Warrant) within ninety (90) days after written notice of the
execution of the definitive agreement with the acquiror is delivered by the
Company or the acquiror to the Holder.
5. NOTICE OF ADJUSTMENTS.
Whenever any Warrant Price shall be adjusted pursuant to Paragraph 4
hereof, the Company shall issue a certificate signed by its chief financial
officer setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was
calculated, and the Warrant Price or Prices after giving effect to such
adjustment, and shall cause copies of such certificate to be mailed (by first
class mail, postage prepaid) to the Holder of this Warrant at the address
specified in Paragraph 10(c) hereof, or at any address provided to the Company
in writing by the Holder of this Warrant.
6. FRACTIONAL SHARES.
No fractional shares of Common Stock will be issued in connection with any
exercise hereunder, but in lieu of such fractional shares the Company shall make
a cash payment therefor upon the basis of the Warrant Price then in effect.
<PAGE>
7. COMPLIANCE WITH SECURITIES ACT-, NON-TRANSFERABILITY OF WARRANT-,
DISPOSITION OF SHARES OF COMMON STOCK.
COMPLIANCE WITH SECURITIES ACT. The Holder of this Warrant, by acceptance
hereof, agrees that this Warrant and the shares of Common Stock to be issued
upon exercise hereof are being acquired for investment and that it will not
offer, sell or otherwise dispose of this Warrant or any shares of Common Stock
to be issued upon exercise hereof except under circumstances which will not
result in a violation of the Securities Act of 1933, as amended (the "Act").
Upon exercise of this Warrant, the Holder hereof shall, if requested by the
Company, confirm in writing, in a form satisfactory to the Company, that the
shares of Common Stock so purchased are being acquired for investment and not
with a view toward distribution or resale. This Warrant and all shares of Common
Stock issued upon exercise of this Warrant (unless registered under the Act)
shall be stamped or imprinted with a legend substantially in the following form:
"THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
THE REGISTRATION PROVISIONS OF SUCH ACT HAVE BEEN COMPLIED WITH OR UNLESS
THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT THE PROPOSED TRANSACTION WILL NOT VIOLATE FEDERAL OR STATE SECURITIES
LAWS."
8. REGISTRATION OF SHARES OF COMMON STOCK UNDERLYING WARRANTS.
8.1 REGISTRATION. The Company shall use reasonable efforts to prepare
and file a registration statement (the "statement") under the Act, to the extent
the Company can qualify to file such a statement, and thereafter continue to use
its best efforts to make effective, a registration statement covering the shares
of Warrant Stock issued or issuable pursuant to the Warrants requested to be
sold by such Holders (Holders may only make the demand one time during the term
of the Warrant), and in connection therewith shall advise the persons entitled
thereto of their rights under Section 8 hereof.
8.2 NOTICE. In connection with the filing of a registration statement
pursuant to this Section, the Company shall:
(a) promptly notify such Holders as to the anticipated filing thereof
and of all amendments thereto filed prior to the effective date of said
registration statement which notice briefly describes the Holders' rights under
this Section 8;
(b) use its best efforts to include in such registration (and any
related filing or qualification under applicable blue sky laws), and in any
underwriting involved therein, all the shares of Warrant Stock specified in a
written request or requests, made by any Holder and received by the Company
within twenty (20) days after the written notice from the Company described in
clause (a) above is mailed or delivered by the Company. Such written request may
specify all or a part of a Holder's shares of Warrant Stock.
(c) UNDERWRITING. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as part of the written notice given pursuant
to clause (a). In such event, the right of any Holder to registration pursuant
to this Section 8 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's shares of Warrant Stock in the
underwriting to the extent provided herein. All such Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and the other holders of securities of the Company with registration
rights to participate therein distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected by the Company.
<PAGE>
(d) notify such Holders promptly after it shall have -received notice
of the time when the registration statement becomes effective or any supplement
to any prospectus forming a part of the registration statement has been filed;
(e) prepare and file without expense to such Holders any necessary
amendment or supplement to such registration statement or prospectus as may be
necessary to comply with Section 10(a)(3) of the Act or advisable in connection
with the proposed distribution of the securities by such Holders;
(f) take all reasonable steps to qualify the shares of Warrant Stock
for sale under the securities or blue sky laws of states as such Holders may
designate in writing and to register or obtain the approval of any federal or
state authority which may be required in connection with the proposed
distribution, except, in each case, in jurisdictions in which the Company must
either qualify to do business or file a general consent to service of process as
a condition to the qualification of such securities;
(g) notify such Holders of any stop order suspending the effectiveness
of the registration statement and use its reasonable best efforts to remove such
stop order;
(h) use its best efforts to keep such registration statement and
prospectus effective for a period of five (5) years after its effective date;
and
(i) furnish to such Holders as soon as available, copies of any such
registration statement and each preliminary or final prospectus and any
supplement or amendment required to be prepared pursuant to the foregoing
provisions of this Section 8, all in such quantities as such Holders may from
time to time reasonably request.
9. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. Subject to the
provisions of Section 7 hereof, this Warrant is exchangeable, without expense,
at the option of the Holder, upon presentation and surrender hereof to the
Company or at the office of its stock transfer agent, if any, for other warrants
of different denominations, entitling the Holder or Holders thereof to purchase
in the aggregate the same number of shares of Warrant Stock purchasable
hereunder. Upon surrender of this Warrant to the Company or at the office of its
stock transfer agent, if any, with the Assignment Form annexed hereto duly
executed and funds sufficient to pay any transfer tax, 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 promptly be
canceled. This Warrant may be divided or combined with other Warrants that carry
the same rights upon presentation hereof at the office of the Company or at the
office of its stock transfer agent, if any, together with a written notice
specifying the names and denominations in which new Warrants are to be issued
and signed by the Holder hereof.
10. MISCELLANEOUS.
(a) NO RIGHTS AS SHAREHOLDER. No Holder of the Warrant or Warrants
shall be entitled to vote or receive dividends or be deemed the Holder of Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder of this Warrant, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger, conveyance, or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until the Warrant or Warrants shall have been
exercised and the Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein.
<PAGE>
(b) REPLACEMENT. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant and, in
the case of loss. theft or destruction, on delivery of any indemnity agreement
or bond reasonably satisfactory in form and amount to the Company or, in the
case of mutilation, on surrender and cancellation of this Warrant, the Company,
at its expense, will execute and deliver. in lieu of this Warrant, a new Warrant
of like tenor.
(c) NOTICE. Any notice given to either party under this Agreement
shall be deemed to be given three (3) days after mailing, postage prepaid,
addressed to such parry at the address as such party may provide to the other.
(d) NO IMPAIRMENT. The Company will not, by amendment of its
Certificate of Incorporation 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 to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying, out of all the provisions in this
Warrant.
(e) GOVERNING Law. This Warrant shall be governed by and construed
under the laws of the State of Colorado without regard to principles of
conflicts of laws. Any action or proceeding brought by the Holder or the Company
against the other arising out of or related to this Warrant shall be brought in
a State or Federal Court of competent jurisdiction located in Denver, Colorado
and the Holder and the Company hereby submit to the jurisdiction of such courts
for the purposes of any such action or proceeding.
(f) The Company shall at all times during the term of this Warrant
reserve and keep available such number of shares of its Common Stock as will be
sufficient to satisfy the requirements of this Warrant.
(g) This Warrant shall be binding upon the Company's successors and
assigns.
(h) The Holder agrees that he will comply with all applicable laws,
rules and regulations of all Federal and State securities regulators including
but not limited to the Securities and Exchange Commission, the National
Association of Securities Dealers and applicable state securities regulators
with respect to disclosure, filings and any other requirements resulting in any
way from the issuance of this Warrant.
IN WITNESS WHEREOF, the parties have signed this Warrant.
DATED: As of October 15, 1997
DCX INC.
Frederick G. Beisser
--------------------------------------------
Frederick G. Beisser, Vice-President
Finance and Administration
HOLDER:
TRANSITION PARTNERS, LIMITED
W. Terrance Schreier
--------------------------------------------
W. Terrance Schreier, President
<PAGE>
EXHIBIT 1
NOTICE OF EXERCISE
TO: DCX INC.
1. The undersigned hereby elects to purchase shares of Common
Stock of DCX, INC. pursuant to the terms of the attached Warrant, and tenders
herewith payment of the purchase price of such shares in full.
2. Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
------------------------------------
(Name)
------------------------------------
------------------------------------
(Address)
3. The undersigned represents that the aforesaid shares of Common Stock
are being acquired for the account of the undersigned for investment and not
with a view to, or for resale in connection with, the distribution thereof and
that the undersigned has no present intention of distributing or reselling such
shares. In support thereof, the undersigned agrees to execute an Investment
Representation Statement in the form attached as Exhibit A.
<PAGE>
EXHIBIT A
INVESTMENT REPRESENTATION STATEMENT
TO: DCX, INC.
With respect to the shares of Common Stock ("Shares") of DCX,
INC. ("Company") which the undersigned ("Purchaser") has purchased from the
Company today, the Purchaser hereby represents and warrants as follows:
1) The Purchaser acknowledges that he has received no formal prospectus or
offer in memorandum describing the business and operations of the Company. He
has, however, by virtue of his relationship with the Company, been given access
to all information that he believes is material to his decision to purchase the
Shares. The Purchaser has had the opportunity to ask questions of, and receive
answers from, representatives of the Company concerning its business operations.
Any questions raised by the Purchaser have been answered to his satisfaction.
2) The Shares are being acquired by the Purchaser for his account, for
investment purposes only, and not with a view to the distribution or resale
thereof.
3) No representations or promises have been made concerning the
marketability or value of the Shares. The Purchaser understands that there is
currently no market for the transfer of the Shares. The Purchaser further
acknowledges that, because the Shares have not been registered under the
Securities Act of 1933, or applicable state securities laws and cannot be resold
unless and cannot be resold unless they are subsequently registered under said
Act or applicable state securities laws, or an exemption from registration is
available, the Purchaser must continue to bear the economic risk of his
investment in the Shares for an indefinite period of time. Specifically, the
Purchaser agrees that the Shares may not be transferred until the Company has
received an opinion of counsel reasonably satisfactory to it that the proposed
transfer will not violate federal or state securities laws. The Company has not
agreed or represented to the Purchaser that the Shares will be purchased or
redeemed from the Purchaser at any time in the future. The Purchaser further
understands that a notation will be made on the appropriate records of the
Company and on the stock certificate representing the Shares so that the
transfers of Shares will not be effected on those records without compliance
with the restrictions referred to above.
Date:
---------------------
------------------------------
Transition Partners Limited
1942 Broadway, Suite 303
Boulder, Colorado l80302
Tel: (303) 938-6834
Fax: (303) 938-6850
VIA FACSIMILE
(303) 688-6106
January 9, 1997
Stephen Carreker
President and Director
DCX, Inc.
3002 N. State Highway 83
Franktown, CO 80116-0569
Dear Stephen:
You have asked Transition Partners, Limited ("TPL") to submit a definitive
proposal describing the basis on which it would serve as a corporate development
and financial advisor to DCX, Inc. ("the Company") for an initial period of
twelve (12) months, commencing January 1, 1997 through December 31, 1997. This
letter will serve to advance your request for such a proposal and confirm TPL's
engagement as the Company's advisor in this regard.
CORPORATE DEVELOPMENT AND FINANCIAL ADVISORY SERVICES
TPL will be pleased to furnish general corporate development, as well as
financial and investment banking, services to the Company to assist it in the
implementation of a fiscal action plan geared to enhance the Company's financial
condition and performance as we have previously discussed. As its financial and
corporate development advisor, TPL will act on behalf of the Company and will
provide independent advice and counsel on issues of a financial nature
pertaining to this engagement. TPL will report directly to you and will keep you
apprised of our activities as you deem appropriate. In carrying out this
assignment, TPL will coordinate its efforts and work closely with other key
members of management and professionals retained to assist you and the Company
in its overall program to achieve various corporate objectives. The services and
activities TPL anticipates performing over the course of this engagement for the
Company can be generally described as follows:
<PAGE>
STRATEGIC PLANNING COORDINATION
TPL will coordinate an in-depth review of the Company's existing business and
strategic operating plan. TPL will not attempt to rewrite or recreate this plan,
but may provide suggestions for modification to it. In this connection, TPL will
interface with all current and future potential resources of the Company as
directed by you.
CAPITAL FORMATION PLAN
As part of the foregoing, strategic operating plan process, TPL will
particularly focus upon the creation of a strategic capital formation plan for
the Company. This may be used by the Company in connection with procurement of
capital from debt, quasi-debt, equity, and other sources, including corporate
strategic alliances. As discussed below, capital may be obtained through such
strategic alliances and third party relationships as ultimately determined by
the Company with the assistance of TPL.
IMPLEMENTATION OF CAPITAL PLAN
TPL will directly assist the Company in implementing the capital plan as
determined by the Company. This may include assisting the Company in its
engagement of investment bankers, merchant bankers, or other financial
intermediaries and advisors on a selective basis and as required by the Company
in consultation specifically with you. TPL is prepared to direct the capital
formation process and requests that it be compensated on a performance basis as
TPL is directed by you, as noted later in this engagement letter. Finally, TPL
would serve as a financial advisor in the execution of this strategy and
implementation of the capital raising effort required to sustain and progress
the Company toward its short term, intermediate, and long term goals.
CORPORATE DEVELOPMENT AND MERGER/ACQUISITION SERVICES
TPL will serve as an advisor to the Company in connection with strategic and
global corporate objectives as you so request. As directed by you, TPL will
provide merger and acquisition services (research, search, contact, due
diligence, deal structure proposal, negotiations, financing proposal, and close)
related to the Company's goal of completing one to three (1-3) strategic
acquisitions during the period coterminous with the term of this engagement. In
addition, TPL will provide executory services related to the accomplishment of
these strategic and global objectives including the creation of strategic
alliance strategies and implementation of such relationships, as well as
licensing, technology transfer, marketing, and/or distribution arrangements
which will allow the Company to fully exploit its technology and services
throughout the U.S. and on an international basis.
The possible services and tasks listed above are reflective of the overall
commitment TPL is prepared to make to assist the Company through its next
critical growth phase. The list is representative of the type of work that will
have to be done by TPL, in order for the Company to achieve its business
objectives. It is based on TPL'S present understanding of the Company's
circumstances, requirements and goals and, as such, is subject to modification
and adjustment in the
-2-
<PAGE>
event that those factors change. Many of the activities outlined are
interrelated, subject to iteration and continuing in nature, to be sure.
Consequently, significant effort and experience will be required to organize,
sequence and coordinate them to best advantage of the Company. We believe TPL
possesses such expertise and is prepared to dedicate the time and resources
required to do the job properly and professionally on a "best efforts" basis. To
this end, the Company and TPL have developed a suggested and agreeable possible
course of action which is attached to this Agreement.
COMPENSATION ARRANGEMENTS
In consideration for acting as financial advisor to the Company in this
engagement, TPL proposes to receive a monthly retainer of six thousand, five
hundred dollars ($6,500) throughout the duration of our engagement. The first
month retainer will be due and payable to TPL at the execution of this Agreement
with the remaining monthly retainers due on the first day of each successive
month of our engagement.
In addition, because of the anticipated intensity of commitment within this
contemplated assignment and relationship, TPL would also request that it be
granted a warrant to acquire up to five percent (5%) of the outstanding shares
of the common stock of the Company as of the date of our engagement (the
"Warrant"). The exercise price of the Warrant shall be fixed at $1.00 per share.
The Warrant will expire five (5) years from the effective date of this
engagement. In addition, the Warrant will be granted to TPL on a non-diluted
basis, such that any increase or decrease in the number of shares of common
stock of the Company which occurs during the term of the Warrant will cause the
Warrant to be proportionately increased or decreased as the case may be. Other
details pertaining to the Warrant will be delineated in a formal agreement
between the Company and TPL to be separately agreed-upon by the Company and TPL.
CONTINGENT ADVISORY FEES AND EXPENSE REIMBURSEMENT
Because the Company has requested TPL to directly procure capital on its behalf,
TPL will charge the Company contingent advisory fees tied to financing
transactions arising in connection with this engagement. Fees for such financing
(the "Success Fee"), payable to TPL by the Company, will be based upon a formula
which is equal to five percent (5%) of the total capital. whether debt and/or
equity of any kind, procured for the Company, by TPL. In addition, TPL will
charge the Company Success Fees based upon this formula for any merger or
acquisition transaction arising in connection with this engagement. Similarly,
if the Company requests additional assistance from TPL to procure one or more
strategic alliances on its behalf, TPL would also be pleased to so assist the
Company. Strategic alliance efforts, undertaken by TPL, resulting in any kind of
exchange (receipt or procurement of any type of capital from whatever source
shall also result in the compensation of TPL by the Company utilizing the
aforementioned Success Fee formula. The Company agrees to pay all Success Fees
to TPL in cash at the closing of each transaction for which TPL is due to be
compensated under this engagement.
Finally, it is also contemplated that reimbursement for all reasonably incurred
out-of-pocket expenses incurred by TPL in connection with any aspect of this
engagement will be paid promptly by the Company to TPL as submitted.
-3-
<PAGE>
BOARD OF DIRECTORS
In connection with this engagement, a representative of TPL shall be designated
as an advisor to the Company's Board of Directors for a period coterminous with
the term of this engagement. Further, TPL will participate with the Company's
Board of Directors in the identification, screening, and proposal of one to
three (1-3) new "outsider," non-employee director candidates.
CONFIDENTIALITY
In connection with TPL's services, the Company will furnish (or cause to be
furnished) to TPL such information and data as is within the Company's
possession or control relating to the Company as TPL reasonably deems necessary
or reasonably requests in order to complete its assignments for the Company. TPL
will keep and maintain all non-public information which it receives or develops
concerning the Company confidential and will disclose such information only as
is required in its reasonable judgement by this assignment or is required by
law. The Company recognizes and confirms that in the performance of its services
hereunder: (i) TPL may rely upon information provided by the Company without
independent verification; (ii) TPL shall incur no liability as a result of such
reliance; and (iii) TPL does not assume responsibility for the accuracy or
completeness of such information, whether or not it makes an independent
verification. TPL will cause any third party that reviews the Company's
information to sign and execute a Confidentiality Statement before delivering
such information to the third party as circumstances may require.
INDEMNIFICATION AND LIMITATION OF LIABILITY
In consideration of TPL's agreement to act on the Company's behalf in connection
with this advisor engagement, the Company agrees to indemnify and hold harmless
TPL and its officers, directors, agents and employees against any loss, claim,
damage, liability, or expense (including reasonable counsel fees and expenses)
arising out of or to which TPL may become subject in connection with this
engagement.
The Company agrees to promptly reimburse TPL for any legal or other expenses as
incurred in connection with investigation or defending any such loss, claim,
damage or liability (or action in respect thereof). In no event shall TPL be
liable for acting in accordance with instructions from the Company or any entity
authorized to act on its behalf.
In addition, should TPL be required to institute any legal proceeding against
the Company for any reason in accordance with any term or condition contained
within this arrangement, TPL shall be entitled to recover its costs and legal
fees which it incurs in connection with such legal proceeding.
EFFECTIVENESS AND TERMINATION
As recited above, the effective date of this engagement shall be January l,
1997. This engagement (except as to matters relating to the Warrant) will
terminate automatically on December 31, 1997, unless otherwise extended by
mutual written agreement. In the event of such automatic termination,
-4-
<PAGE>
TPL shall be entitled to all compensation due through the date of termination,
including base and contingent advisory fees as specified earlier in this letter,
all warrants, as well as all unpaid out-of pocket expenses. TPL shall also be
entitled to contingent advisory fees, as outlined above, for transactions
originating during the course of this engagement and completed within twelve
months from the date of automatic termination.
MISCELLANEOUS
This agreement may not be amended or modified except in writing and shall be
governed and construed in accordance with the laws of the State of Colorado. The
warrant arrangement, as well as the indemnity and reimbursement provisions
contained herein, shall remain in full force and effect in the event of
termination. The invalidity, legality or enforceability of any provision of this
agreement shall in no way affect the validity, legality or enforceability of any
other provision. If any provision is held to be unenforceable as a matter of
law, the other provisions shall not be affected thereby and shall remain in full
force and effect.
Please confirm that the foregoing proposal is in accordance with our
understanding and is acceptable to you by signing and returning to me the
enclosed duplicate original engagement letter. We look forward to a successful
relationship, culminating in the attainment of these mutually desirable
objectives on behalf of the Company.
Sincerely, Agreed to and accepted:
TRANSITION PARTNERS, LIMITED DCX, INC.
By: W. Terrance Schreier
-------------------------------- By: Stephen Carreker
W. Terrance Schreier ------------------------------
Managing Director and President Stephen Carreker
President and Director
By: Gene R. Copeland
-------------------------------- January 13, 1997
Gene Copeland
Managing Director
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND HAS BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO
THE DISTRIBUTION THEREOF, AND THIS WARRANT MAY NOT BE SOLD OR TRANSFERRED UNLESS
THERE IS AN EFFECTIVE REGISTRATION STATEMENT COVERING IT OR THE COMPANY RECEIVES
AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) FROM THE TRANSFEROR
REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
No. Warrant to Purchase 111,260 Shares
------------ of Common Stock (subject to adjustment)
Date: January 15, 1997
WARRANT
TO PURCHASE COMMON STOCK OF DCX, INC.
This certifies that, in consideration of value heretofore received by DCX,
INC., a Colorado corporation (the "Company") receipt of which is hereby
acknowledged, COPELAND CONSULTING GROUP, INC., 5373 Lookout Ridge Drive,
Boulder, CO 80301 ("Holder") is entitled to subscribe for and purchase up to
111,260 shares of fully paid and nonassessable Common Stock of the Company, at
the price of $1.00 per share, as adjusted pursuant to Paragraph 4 hereof (the
"Warrant Price"), subject to the provisions and upon the terms and conditions
hereinafter set forth.
As used herein, the term "Common Stock" shall mean the Company's presently
authorized Common Stock and any stock into which such Common Stock may hereafter
be exchanged.
1. TERM.
The purchase right represented by this Warrant is exercisable, in whole or
in part at any time following the date hereof until JANUARY 14, 2002.
2. METHOD OF EXERCISE; PAYMENT: ISSUANCE OF NEW WARRANT.
Subject to paragraph I hereof, the purchase right represented by this
Warrant may be exercised by the holder hereof, in whole or in part, by the
surrender of this Warrant (with the notice of exercise form attached hereto as
Exhibit 1 duly executed) at the principal office of the Company and by the
payment to the Company, by either: (a) a check, of an amount equal to the then
applicable Warrant Price per share multiplied by the number of shares of common
stock then being purchased; or (b) that number of shares of common stock of the
Company having a fair market value equal to the then applicable warrant price
per share multiplied by the number of shares of common stock then being
purchased. In the event of any exercise of the rights represented by this
Warrant, certificates for the shares of stock so purchased shall be delivered to
the Holder hereof within five (5) business days and, unless this Warrant has
been fully exercised or expired, a new Warrant representing the portion of the
shares, if any, with respect to which this Warrant shall not then have been
exercised shall also be issued to the Holder hereof within such reasonable time.
3. STOCK FULLY PAID, RESERVATION OF SHARES.
All Common Stock which may be issued upon the exercise of the rights
represented by this Warrant ("Warrant Stock") will, upon issuance, be fully paid
and nonassessable, and free from all taxes, liens and charges with respect to
the issue thereof. During the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized, and
reserved for the purpose of the issue upon exercise of the purchase rights
evidenced by this Warrant, a sufficient number of shares of its Common Stock to
provide for the exercise of the rights represented by this Warrant.
<PAGE>
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES.
If there shall be any change described in sub-paragraphs (a), (b) or ( c)
below, the aggregate Warrant Price shall remain unchanged but the number of
shares covered by this Warrant shall in each instance be adjusted as follows:
a. If a share dividend is declared on the Common Stock of the Company, the
number of shares of Common Stock subject to this Warrant shall be increased by
the number of shares which would have been issuable to the Holder if such Holder
had exercised this Warrant immediately prior to the record date related to the
declaration and payment of such share dividend;
b. If an increase or decrease is effected in the number of outstanding
shares of Common Stock by reason of subdivision or combination of such shares,
the number of shares of Common Stock subject to this Warrant shall equal the
number of shares which would have been held by the Holder after consummation of
such combination or subdivision if the Holder had exercised this Warrant
immediately prior to the record date related to such subdivision or combination
and the Holder held no other shares of Common Stock other than those deemed
issued upon exercise of this Warrant; and
c. In case of a capital reorganization, merger (except a merger in which
the Company is the surviving corporation), or the sale of all or substantially
all of the properties and assets of the Company (each of the foregoing is
sometimes hereinafter referred to as a "Reorganization"), the securities or any
other property to be received upon exercise of this Warrant shall be the
securities and other property which would have been held by the Holder after
consummation of such Reorganization if the Holder had exercised this Warrant
immediately prior to the record date related to such Reorganization and the
Holder held no other shares of Common Stock other than those deemed issued upon
exercise of this Warrant. Notwithstanding anything herein to the contrary, in
the case of a Reorganization which qualifies for adjustment under this
subparagraph ( c), the Holder must exercise this Warrant (or agree to exercise
this Warrant) within ninety (90) days after written notice of the execution of
the definitive agreement with the acquiror is delivered by the Company or the
acquiror to the Holder.
5. NOTICE OF ADJUSTMENTS.
Whenever any Warrant Price shall be adjusted pursuant to Paragraph 4
hereof, the Company shall issue a certificate signed by its chief financial
officer setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was
calculated, and the Warrant Price or Prices after giving effect to such
adjustment, and shall cause copies of such certificate to be mailed (by first
class mail, postage prepaid) to the Holder of this Warrant at the address
specified in Paragraph 10(c) hereof, or at any address provided to the Company
in writing by the Holder of this Warrant.
6. FRACTIONAL SHARES.
No fractional shares of Common Stock will be issued in connection with any
exercise hereunder, but in lieu of such fractional shares the Company shall make
a cash payment therefor upon the basis of the Warrant Price then in effect.
<PAGE>
7. COMPLIANCE WITH SECURITIES ACT-, NON-TRANSFERABILITY OF WARRANT-,
DISPOSITION OF SHARES OF COMMON STOCK.
COMPLIANCE WITH SECURITIES ACT. The Holder of this Warrant, by acceptance
hereof, agrees that this Warrant and the shares of Common Stock to be issued
upon exercise hereof are being acquired for investment and that it will not
offer, sell or otherwise dispose of this Warrant or any shares of Common Stock
to be issued upon exercise hereof except under circumstances which will not
result in a violation of the Securities Act of 1933, as amended (the "Act").
Upon exercise of this Warrant, the Holder hereof shall, if requested by the
Company, confirm in writing, in a form satisfactory to the Company, that the
shares of Common Stock so purchased are being acquired for investment and not
with a view toward distribution or resale. This Warrant and all shares of Common
Stock issued upon exercise of this Warrant (unless registered under the Act)
shall be stamped or imprinted with a legend substantially in the following form:
"THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
THE REGISTRATION PROVISIONS OF SUCH ACT HAVE BEEN COMPLIED WITH OR UNLESS
THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT THE PROPOSED TRANSACTION WILL NOT VIOLATE FEDERAL OR STATE SECURITIES
LAWS."
8. REGISTRATION OF SHARES OF COMMON STOCK UNDERLYING WARRANTS.
8.1 REGISTRATION. The Company shall use reasonable efforts to prepare and
file a registration statement (the "statement") under the Act, to the extent the
Company can qualify to file such a statement, and thereafter continue to use its
best efforts to make effective, a registration statement covering the shares of
Warrant Stock issued or issuable pursuant to the Warrants requested to be sold
by such Holders (Holders may only make the demand one time during the term of
the Warrant), and in connection therewith shall advise the persons entitled
thereto of their rights under Section 8 hereof.
8.2 NOTICE. In connection with the filing of a registration statement
pursuant to this Section, the Company shall:
(a) promptly notify such Holders as to the anticipated filing thereof and
of all amendments thereto filed prior to the effective date of said registration
statement which notice briefly describes the Holders' rights under this Section
8;
(b) use its best efforts to include in such registration (and any related
filing or qualification under applicable blue sky laws), and in any underwriting
involved therein, all the shares of Warrant Stock specified in a written request
or requests, made by any Holder and received by the Company within twenty (20)
days after the written notice from the Company described in clause (a) above is
mailed or delivered by the Company. Such written request may specify all or a
part of a Holder's shares of Warrant Stock.
(c) UNDERWRITING. If the registration of which the Company gives notice is
for a registered public offering involving an underwriting, the Company shall so
advise the Holders as part of the written notice given pursuant to clause (a).
In such event, the right of any Holder to registration pursuant to this Section
8 shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's shares of Warrant Stock in the underwriting to
the extent provided herein. All such Holders proposing to distribute their
securities through such underwriting shall (together with the Company and the
other holders of securities of the Company with registration rights to
participate therein distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the representative
of the underwriter or underwriters selected by the Company.
<PAGE>
(d) notify such Holders promptly after it shall have -received notice of
the time when the registration statement becomes effective or any supplement to
any prospectus forming a part of the registration statement has been filed;
(e) prepare and file without expense to such Holders any necessary
amendment or supplement to such registration statement or prospectus as may be
necessary to comply with Section 10(a)(3) of the Act or advisable in connection
with the proposed distribution of the securities by such Holders;
(f) take all reasonable steps to qualify the shares of Warrant Stock for
sale under the securities or blue sky laws of states as such Holders may
designate in writing and to register or obtain the approval of any federal or
state authority which may be required in connection with the proposed
distribution, except, in each case, in jurisdictions in which the Company must
either qualify to do business or file a general consent to service of process as
a condition to the qualification of such securities;
(g) notify such Holders of any stop order suspending the effectiveness of
the registration statement and use its reasonable best efforts to remove such
stop order;
(h) use its best efforts to keep such registration statement and prospectus
effective for a period of five (5) years after its effective date; and
(i) furnish to such Holders as soon as available, copies of any such
registration statement and each preliminary or final prospectus and any
supplement or amendment required to be prepared pursuant to the foregoing
provisions of this Section 8, all in such quantities as such Holders may from
time to time reasonably request.
9. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.
Subject to the provisions of Section 7 hereof, this Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other warrants of different denominations, entitling the
Holder or Holders thereof to purchase in the aggregate the same number of shares
of Warrant Stock purchasable hereunder. Upon surrender of this Warrant to the
Company or at the office of its stock transfer agent, if any, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, 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 promptly be canceled. This Warrant may be divided or combined
with other Warrants that carry the same rights upon presentation hereof at the
office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof.
10. MISCELLANEOUS.
(a) NO RIGHTS AS SHAREHOLDER. No Holder of the Warrant or Warrants shall be
entitled to vote or receive dividends or be deemed the Holder of Common Stock or
any other securities of the Company which may at any time be issuable on the
exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder of this Warrant, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger, conveyance, or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until the Warrant or Warrants shall have been
exercised and the Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein.
<PAGE>
(b) REPLACEMENT. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant and, in
the case of loss. theft or destruction, on delivery of any indemnity agreement
or bond reasonably satisfactory in form and amount to the Company or, in the
case of mutilation, on surrender and cancellation of this Warrant, the Company,
at its expense, will execute and deliver. in lieu of this Warrant, a new Warrant
of like tenor.
(c) NOTICE. Any notice given to either party under this Agreement shall be
deemed to be given three (3) days after mailing, postage prepaid, addressed to
such parry at the address as such party may provide to the other.
(d) NO IMPAIRMENT. The Company will not, by amendment of its Certificate of
Incorporation 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 to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying, out of all the provisions in this Warrant.
(e) GOVERNING Law. This Warrant shall be governed by and construed under
the laws of the State of Colorado without regard to principles of conflicts of
laws. Any action or proceeding brought by the Holder or the Company against the
other arising out of or related to this Warrant shall be brought in a State or
Federal Court of competent jurisdiction located in Denver, Colorado and the
Holder and the Company hereby submit to the jurisdiction of such courts for the
purposes of any such action or proceeding.
(f) The Company shall at all times during the term of this Warrant reserve
and keep available such number of shares of its Common Stock as will be
sufficient to satisfy the requirements of this Warrant.
(g) This Warrant shall be binding upon the Company's successors and
assigns.
(h) The Holder agrees that he will comply with all applicable laws, rules
and regulations of all Federal and State securities regulators including but not
limited to the Securities and Exchange Commission, the National Association of
Securities Dealers and applicable state securities regulators with respect to
disclosure, filings and any other requirements resulting in any way from the
issuance of this Warrant.
IN WITNESS WHEREOF, the parties have signed this Warrant.
DATED: As of May 5, 1997
DCX INC.
G. Stephen Carreker
----------------------------------------------
G. Stephen Carreker, President and Chief
Executive Officer
HOLDER:
COPELAND CONSULTING GROUP, INC.
Gene R. Copeland
----------------------------------------------
Gene R. Copeland, President
<PAGE>
EXHIBIT 1
NOTICE OF EXERCISE
TO: DCX INC.
1. The undersigned hereby elects to purchase shares of Common
----------
Stock of DCX, INC. pursuant to the terms of the attached Warrant, and tenders
herewith payment of the purchase price of such shares in full.
2. Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
------------------------------------
(Name)
------------------------------------
------------------------------------
(Address)
3. The undersigned represents that the aforesaid shares of Common Stock are
being acquired for the account of the undersigned for investment and not with a
view to, or for resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such shares.
In support thereof, the undersigned agrees to execute an Investment
Representation Statement in the form attached as Exhibit A.
<PAGE>
EXHIBIT A
INVESTMENT REPRESENTATION STATEMENT
TO: DCX, INC.
With respect to the shares of Common Stock ("Shares") of DCX,
---------------
INC. ("Company") which the undersigned ("Purchaser") has purchased from the
Company today, the Purchaser hereby represents and warrants as follows:
1) The Purchaser acknowledges that he has received no formal prospectus or
offer in memorandum describing the business and operations of the Company. He
has, however, by virtue of his relationship with the Company, been given access
to all information that he believes is material to his decision to purchase the
Shares. The Purchaser has had the opportunity to ask questions of, and receive
answers from, representatives of the Company concerning its business operations.
Any questions raised by the Purchaser have been answered to his satisfaction.
2) The Shares are being acquired by the Purchaser for his account, for
investment purposes only, and not with a view to the distribution or resale
thereof.
3) No representations or promises have been made concerning the
marketability or value of the Shares. The Purchaser understands that there is
currently no market for the transfer of the Shares. The Purchaser further
acknowledges that, because the Shares have not been registered under the
Securities Act of 1933, or applicable state securities laws and cannot be resold
unless and cannot be resold unless they are subsequently registered under said
Act or applicable state securities laws, or an exemption from registration is
available, the Purchaser must continue to bear the economic risk of his
investment in the Shares for an indefinite period of time. Specifically, the
Purchaser agrees that the Shares may not be transferred until the Company has
received an opinion of counsel reasonably satisfactory to it that the proposed
transfer will not violate federal or state securities laws. The Company has not
agreed or represented to the Purchaser that the Shares will be purchased or
redeemed from the Purchaser at any time in the future. The Purchaser further
understands that a notation will be made on the appropriate records of the
Company and on the stock certificate representing the Shares so that the
transfers of Shares will not be effected on those records without compliance
with the restrictions referred to above.
Date:
-----------------------
------------------------------
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND HAS BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO
THE DISTRIBUTION THEREOF, AND THIS WARRANT MAY NOT BE SOLD OR TRANSFERRED UNLESS
THERE IS AN EFFECTIVE REGISTRATION STATEMENT COVERING IT OR THE COMPANY RECEIVES
AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) FROM THE TRANSFEROR
REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
No. Warrant to Purchase 295,056 Shares
-------------- of Common Stock (subject to adjustment)
Date: October 15, 1997
WARRANT
TO PURCHASE COMMON STOCK OF DCX, INC.
This certifies that, in consideration of value heretofore received by DCX,
INC., a Colorado corporation (the "Company") receipt of which is hereby
acknowledged, COPELAND CONSULTING GROUP, INC., 5373 Lookout Ridge Drive,
Boulder, CO 80301 ("Holder") is entitled to subscribe for and purchase up to
295,056 shares of fully paid and nonassessable Common Stock of the Company, at
the price of $1.00 per share, as adjusted pursuant to Paragraph 4 hereof (the
"Warrant Price"), subject to the provisions and upon the terms and conditions
hereinafter set forth.
As used herein, the term "Common Stock" shall mean the Company's presently
authorized Common Stock and any stock into which such Common Stock may hereafter
be exchanged.
1. TERM.
The purchase right represented by this Warrant is exercisable, in whole or
in part at any time following the date hereof until JANUARY 14, 2002.
2. METHOD OF EXERCISE; PAYMENT: ISSUANCE OF NEW WARRANT.
Subject to paragraph I hereof, the purchase right represented by this
Warrant may be exercised by the holder hereof, in whole or in part, by the
surrender of this Warrant (with the notice of exercise form attached hereto as
Exhibit 1 duly executed) at the principal office of the Company and by the
payment to the Company, by either: (a) a check, of an amount equal to the then
applicable Warrant Price per share multiplied by the number of shares of common
stock then being purchased; or (b) that number of shares of common stock of the
Company having a fair market value equal to the then applicable warrant price
per share multiplied by the number of shares of common stock then being
purchased. In the event of any exercise of the rights represented by this
Warrant, certificates for the shares of stock so purchased shall be delivered to
the Holder hereof within five (5) business days and, unless this Warrant has
been fully exercised or expired, a new Warrant representing the portion of the
shares, if any, with respect to which this Warrant shall not then have been
exercised shall also be issued to the Holder hereof within such reasonable time.
3. STOCK FULLY PAID, RESERVATION OF SHARES.
All Common Stock which may be issued upon the exercise of the rights
represented by this Warrant ("Warrant Stock") will, upon issuance, be fully paid
and nonassessable, and free from all taxes, liens and charges with respect to
the issue thereof. During the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized, and
reserved for the purpose of the issue upon exercise of the purchase rights
evidenced by this Warrant, a sufficient number of shares of its Common Stock to
provide for the exercise of the rights represented by this Warrant.
<PAGE>
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES.
If there shall be any change described in sub-paragraphs (a), (b) or ( c)
below, the aggregate Warrant Price shall remain unchanged but the number of
shares covered by this Warrant shall in each instance be adjusted as follows:
a. If a share dividend is declared on the Common Stock of the Company, the
number of shares of Common Stock subject to this Warrant shall be increased by
the number of shares which would have been issuable to the Holder if such Holder
had exercised this Warrant immediately prior to the record date related to the
declaration and payment of such share dividend;
b. If an increase or decrease is effected in the number of outstanding
shares of Common Stock by reason of subdivision or combination of such shares,
the number of shares of Common Stock subject to this Warrant shall equal the
number of shares which would have been held by the Holder after consummation of
such combination or subdivision if the Holder had exercised this Warrant
immediately prior to the record date related to such subdivision or combination
and the Holder held no other shares of Common Stock other than those deemed
issued upon exercise of this Warrant; and
c. In case of a capital reorganization, merger (except a merger in which
the Company is the surviving corporation), or the sale of all or substantially
all of the properties and assets of the Company (each of the foregoing is
sometimes hereinafter referred to as a "Reorganization"), the securities or any
other property to be received upon exercise of this Warrant shall be the
securities and other property which would have been held by the Holder after
consummation of such Reorganization if the Holder had exercised this Warrant
immediately prior to the record date related to such Reorganization and the
Holder held no other shares of Common Stock other than those deemed issued upon
exercise of this Warrant. Notwithstanding anything herein to the contrary, in
the case of a Reorganization which qualifies for adjustment under this
subparagraph ( c), the Holder must exercise this Warrant (or agree to exercise
this Warrant) within ninety (90) days after written notice of the execution of
the definitive agreement with the acquiror is delivered by the Company or the
acquiror to the Holder.
5. NOTICE OF ADJUSTMENTS.
Whenever any Warrant Price shall be adjusted pursuant to Paragraph 4
hereof, the Company shall issue a certificate signed by its chief financial
officer setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was
calculated, and the Warrant Price or Prices after giving effect to such
adjustment, and shall cause copies of such certificate to be mailed (by first
class mail, postage prepaid) to the Holder of this Warrant at the address
specified in Paragraph 10(c) hereof, or at any address provided to the Company
in writing by the Holder of this Warrant.
6. FRACTIONAL SHARES.
No fractional shares of Common Stock will be issued in connection with any
exercise hereunder, but in lieu of such fractional shares the Company shall make
a cash payment therefor upon the basis of the Warrant Price then in effect.
<PAGE>
7. COMPLIANCE WITH SECURITIES ACT-, NON-TRANSFERABILITY OF WARRANT-,
DISPOSITION OF SHARES OF COMMON STOCK.
COMPLIANCE WITH SECURITIES ACT. The Holder of this Warrant, by acceptance
hereof, agrees that this Warrant and the shares of Common Stock to be issued
upon exercise hereof are being acquired for investment and that it will not
offer, sell or otherwise dispose of this Warrant or any shares of Common Stock
to be issued upon exercise hereof except under circumstances which will not
result in a violation of the Securities Act of 1933, as amended (the "Act").
Upon exercise of this Warrant, the Holder hereof shall, if requested by the
Company, confirm in writing, in a form satisfactory to the Company, that the
shares of Common Stock so purchased are being acquired for investment and not
with a view toward distribution or resale. This Warrant and all shares of Common
Stock issued upon exercise of this Warrant (unless registered under the Act)
shall be stamped or imprinted with a legend substantially in the following form:
"THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
THE REGISTRATION PROVISIONS OF SUCH ACT HAVE BEEN COMPLIED WITH OR UNLESS
THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT THE PROPOSED TRANSACTION WILL NOT VIOLATE FEDERAL OR STATE SECURITIES
LAWS."
8. REGISTRATION OF SHARES OF COMMON STOCK UNDERLYING WARRANTS.
8.1 REGISTRATION. The Company shall use reasonable efforts to prepare and
file a registration statement (the "statement") under the Act, to the extent the
Company can qualify to file such a statement, and thereafter continue to use its
best efforts to make effective, a registration statement covering the shares of
Warrant Stock issued or issuable pursuant to the Warrants requested to be sold
by such Holders (Holders may only make the demand one time during the term of
the Warrant), and in connection therewith shall advise the persons entitled
thereto of their rights under Section 8 hereof.
8.2 NOTICE. In connection with the filing of a registration statement
pursuant to this Section, the Company shall:
(a) promptly notify such Holders as to the anticipated filing thereof and
of all amendments thereto filed prior to the effective date of said registration
statement which notice briefly describes the Holders' rights under this Section
8;
(b) use its best efforts to include in such registration (and any related
filing or qualification under applicable blue sky laws), and in any underwriting
involved therein, all the shares of Warrant Stock specified in a written request
or requests, made by any Holder and received by the Company within twenty (20)
days after the written notice from the Company described in clause (a) above is
mailed or delivered by the Company. Such written request may specify all or a
part of a Holder's shares of Warrant Stock.
(c) UNDERWRITING. If the registration of which the Company gives notice is
for a registered public offering involving an underwriting, the Company shall so
advise the Holders as part of the written notice given pursuant to clause (a).
In such event, the right of any Holder to registration pursuant to this Section
8 shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's shares of Warrant Stock in the underwriting to
the extent provided herein. All such Holders proposing to distribute their
securities through such underwriting shall (together with the Company and the
other holders of securities of the Company with registration rights to
participate therein distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the representative
of the underwriter or underwriters selected by the Company.
<PAGE>
(d) notify such Holders promptly after it shall have -received notice of
the time when the registration statement becomes effective or any supplement to
any prospectus forming a part of the registration statement has been filed;
(e) prepare and file without expense to such Holders any necessary
amendment or supplement to such registration statement or prospectus as may be
necessary to comply with Section 10(a)(3) of the Act or advisable in connection
with the proposed distribution of the securities by such Holders;
(f) take all reasonable steps to qualify the shares of Warrant Stock for
sale under the securities or blue sky laws of states as such Holders may
designate in writing and to register or obtain the approval of any federal or
state authority which may be required in connection with the proposed
distribution, except, in each case, in jurisdictions in which the Company must
either qualify to do business or file a general consent to service of process as
a condition to the qualification of such securities;
(g) notify such Holders of any stop order suspending the effectiveness of
the registration statement and use its reasonable best efforts to remove such
stop order;
(h) use its best efforts to keep such registration statement and prospectus
effective for a period of five (5) years after its effective date; and
(i) furnish to such Holders as soon as available, copies of any such
registration statement and each preliminary or final prospectus and any
supplement or amendment required to be prepared pursuant to the foregoing
provisions of this Section 8, all in such quantities as such Holders may from
time to time reasonably request.
9. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.
Subject to the provisions of Section 7 hereof, this Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other warrants of different denominations, entitling the
Holder or Holders thereof to purchase in the aggregate the same number of shares
of Warrant Stock purchasable hereunder. Upon surrender of this Warrant to the
Company or at the office of its stock transfer agent, if any, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, 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 promptly be canceled. This Warrant may be divided or combined
with other Warrants that carry the same rights upon presentation hereof at the
office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof.
10. MISCELLANEOUS.
(a) NO RIGHTS AS SHAREHOLDER. No Holder of the Warrant or Warrants shall be
entitled to vote or receive dividends or be deemed the Holder of Common Stock or
any other securities of the Company which may at any time be issuable on the
exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder of this Warrant, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger, conveyance, or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until the Warrant or Warrants shall have been
exercised and the Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein.
<PAGE>
(b) REPLACEMENT. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant and, in
the case of loss. theft or destruction, on delivery of any indemnity agreement
or bond reasonably satisfactory in form and amount to the Company or, in the
case of mutilation, on surrender and cancellation of this Warrant, the Company,
at its expense, will execute and deliver. in lieu of this Warrant, a new Warrant
of like tenor.
(c) NOTICE. Any notice given to either party under this Agreement shall be
deemed to be given three (3) days after mailing, postage prepaid, addressed to
such parry at the address as such party may provide to the other.
(d) NO IMPAIRMENT. The Company will not, by amendment of its Certificate of
Incorporation 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 to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying, out of all the provisions in this Warrant.
(e) GOVERNING Law. This Warrant shall be governed by and construed under
the laws of the State of Colorado without regard to principles of conflicts of
laws. Any action or proceeding brought by the Holder or the Company against the
other arising out of or related to this Warrant shall be brought in a State or
Federal Court of competent jurisdiction located in Denver, Colorado and the
Holder and the Company hereby submit to the jurisdiction of such courts for the
purposes of any such action or proceeding.
(f) The Company shall at all times during the term of this Warrant reserve
and keep available such number of shares of its Common Stock as will be
sufficient to satisfy the requirements of this Warrant.
(g) This Warrant shall be binding upon the Company's successors and
assigns.
(h) The Holder agrees that he will comply with all applicable laws, rules
and regulations of all Federal and State securities regulators including but not
limited to the Securities and Exchange Commission, the National Association of
Securities Dealers and applicable state securities regulators with respect to
disclosure, filings and any other requirements resulting in any way from the
issuance of this Warrant.
IN WITNESS WHEREOF, the parties have signed this Warrant.
DATED: As of October 15, 1997
DCX INC.
Frederick G. Beisser
----------------------------------------------
Frederick G. Beisser, Vice President, Finance
HOLDER:
COPELAND CONSULTING GROUP, INC.
Gene R. Copeland
----------------------------------------------
Gene R. Copeland, President
<PAGE>
EXHIBIT 1
NOTICE OF EXERCISE
TO: DCX INC.
1. The undersigned hereby elects to purchase shares of Common
----------
Stock of DCX, INC. pursuant to the terms of the attached Warrant, and tenders
herewith payment of the purchase price of such shares in full.
2. Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
------------------------------------
(Name)
------------------------------------
------------------------------------
(Address)
3. The undersigned represents that the aforesaid shares of Common Stock are
being acquired for the account of the undersigned for investment and not with a
view to, or for resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such shares.
In support thereof, the undersigned agrees to execute an Investment
Representation Statement in the form attached as Exhibit A.
<PAGE>
EXHIBIT A
INVESTMENT REPRESENTATION STATEMENT
TO: DCX, INC.
With respect to the shares of Common Stock ("Shares") of DCX,
---------------
INC. ("Company") which the undersigned ("Purchaser") has purchased from the
Company today, the Purchaser hereby represents and warrants as follows:
1) The Purchaser acknowledges that he has received no formal prospectus or
offer in memorandum describing the business and operations of the Company. He
has, however, by virtue of his relationship with the Company, been given access
to all information that he believes is material to his decision to purchase the
Shares. The Purchaser has had the opportunity to ask questions of, and receive
answers from, representatives of the Company concerning its business operations.
Any questions raised by the Purchaser have been answered to his satisfaction.
2) The Shares are being acquired by the Purchaser for his account, for
investment purposes only, and not with a view to the distribution or resale
thereof.
3) No representations or promises have been made concerning the
marketability or value of the Shares. The Purchaser understands that there is
currently no market for the transfer of the Shares. The Purchaser further
acknowledges that, because the Shares have not been registered under the
Securities Act of 1933, or applicable state securities laws and cannot be resold
unless and cannot be resold unless they are subsequently registered under said
Act or applicable state securities laws, or an exemption from registration is
available, the Purchaser must continue to bear the economic risk of his
investment in the Shares for an indefinite period of time. Specifically, the
Purchaser agrees that the Shares may not be transferred until the Company has
received an opinion of counsel reasonably satisfactory to it that the proposed
transfer will not violate federal or state securities laws. The Company has not
agreed or represented to the Purchaser that the Shares will be purchased or
redeemed from the Purchaser at any time in the future. The Purchaser further
understands that a notation will be made on the appropriate records of the
Company and on the stock certificate representing the Shares so that the
transfers of Shares will not be effected on those records without compliance
with the restrictions referred to above.
Date:
-----------------------
------------------------------
SCHEDULE I
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE
ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
Void after 5:00 p.m., Mountain Standard Time, on June 30, 1999.
DCX, INC.
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, Spencer Edwards, Inc., a Colorado
corporation is entitled to purchase the number of Warrant Shares (as that term
is defined herein) of Common Stock of DCX, INC., a Colorado corporation, at a
price of $2.25 per share ("Warrant Price"), subject to adjustments and all other
terms and conditions set forth in this Warrant.
1. DEFINITIONS. As used herein, the following terms, unless the context
otherwise requires, shall have the following meanings:
(a) "Act" shall mean the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
(b) "Commission" shall mean the Securities and Exchange Commission,
or any other Federal agency at the time administering the Act.
(c) "Common Stock" shall mean shares of the Company's presently or
subsequently authorized Common Stock. and any stock into which such Common Stock
may hereafter be exchanged.
(d) "Company" shall mean DCX, INC., a Colorado corporation, and any
corporation which shall succeed to or assume the obligations of DCX, INC. under
this Warrant.
(e) "Date of Grant" shall he deemed June 19, 1997.
(f) "Exercise Date" shall mean the effective date of the delivery of
the Notice of Exercise pursuant to Sections 4 and 11 below.
1
<PAGE>
(g) "Holder" shall mean any person who shall at the time be the
registered holder of this Warrant.
(h) "Shares" shall mean shares of the Company's Common Stock, as
described in the Company's certificate of determination and articles of
incorporation.
(i) "Warrant Shares" shall mean 120,000 shares of the Company's
Common Stock which this Warrant entitles the Holder to purchase, provided that
the Warrant Shares have become vested as provided in Section 3 hereof.
2. ISSUANCE OF WARRANT AND CONSIDERATION THEREFOR. This Warrant is issued
in consideration of the Holder's agreements set forth in that certain Investment
Banking Services Agreement (the "Banking Agreement") of even date between Holder
and the Company.
3. TERM AND ADJUSTMENT TO EXERCISE PRICE.
(a) The purchase right represented by this Warrant is exercisable
only during the period commencing upon the Date of Grant and ending on the
earlier of (i) June 30, 1999 or (ii) concurrently with the closing date of a
sale of all or substantially all of the Company's assets; a merger of the
Company with or into another entity or of an entity with or into the Company
following which the voting control of the surviving entity in the merger is
ultimately controlled by persons who presently do not own beneficially or
otherwise 10 percent or more of the issued and outstanding voting stock of the
Company; or sale by existing shareholders of at least 51 percent of the
presently issued and outstanding stock of the Company. The foregoing events are
collectively referred to as a "change of control." After June 30, 1999 or a
change of control, this Warrant shall be of no further force or effect.
(b) The Warrant Shares shall vest in the Holder 100 percent
immediately prior to a change of control.
(c) Upon the expiration of the Termination Period, as defined in the
Banking Agreement, this Warrant may only be exercised as to that portion of
Warrant Shares which are then vested and shall be of no further force or effect,
nor may it be exercised as to any Warrant Shares as which are not vested. All
vesting shall terminate effective upon the expiration of the Termination Period,
as defined in the Banking Agreement.
(d) This Warrant shall otherwise vest as follows:
NO. OF WARRANT SHARES DATE OF VESTING
o 40,000 June 19, 1997
o 40,000 September 18, 1997*
2
<PAGE>
o 40,000 December 17, 1997
* If Banker produces a research report within three months of the Date of
grant, an additional 25,000 Warrants shall vest upon the approval by the
Company of the research report. Company agrees that such approval shall
not be unreasonably delayed.
4. METHOD OF EXERCISE AND PAYMENT.
(a) METHOD OF EXERCISE. Subject to Section 3 hereof and compliance
with all applicable Federal and state securities laws, the purchase right
represented by this Warrant may be exercised, in whole or in part and from time
to time, by the Holder by (i) surrender of this Warrant and delivery of the
Notice of Exercise (the form of which is attached hereto as Exhibit A), duly
executed, at the principal office of the Company and (ii) payment to the Company
of an amount equal to the product of the then applicable Warrant Price
multiplied by the number of Shares then being purchased pursuant to one of the
payment methods permitted under Section 4(b) below.
(b) METHOD OF PAYMENT. Payment shall be made either (1) by check
made payable to the Company, (2) by cash, or (3) by wire transfer of United
States funds for the account of the Company.
(c) DELIVERY OF CERTIFICATE. In the event of any exercise of the
purchase right represented by this Warrant, certificates for the Shares so
purchased shall be delivered to the Holder within thirty (30) days of delivery
of the Notice of Exercise and, unless this Warrant has been fully exercised or
has expired, a new warrant representing the portion of the Shares with respect
to which this Warrant shall not then have been exercised shall also be issued to
the Holder within such thirty (30) day period.
(d) NO FRACTIONAL SHARES. No fractional shares shall be issued in
connection with any exercise hereunder, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the fair market
value per Share as of the date of exercise.
5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. In case the Company
shall at any time after the Date of Grant (i) subdivide the outstanding shares
of its common stock, (ii) combine the outstanding shares of its common stock
into a smaller number of shares of common stock, or (iii) issue by
reclassification of its shares of common stock other securities of the Company
(including any such reclassification in connection with a consolidation or
merger in which the Company is the surviving person), the number and kind of
shares purchasable upon exercise of this Warrant outstanding immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive at the
same aggregate Warrant Price the kind and number of shares of common stock or
other securities to the Company which the holder would have owned or have been
entitled to receive after the happening of any of the events described above had
such Warrant been exercised in full immediately prior to the earlier of the
happening of such event or any record date with respect
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<PAGE>
thereto. In the event of any adjustment of the total number of shares of common
stock purchasable upon the exercise of this Warrant, the Warrant Price shall be
adjusted to be the amount resulting from dividing the number of shares of common
stock (including fractional shares of common stock) covered by this Warrant
immediately after such adjustment into the total amount payable upon exercise of
this Warrant in full immediately prior to such adjustment. An 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. Such adjustment shall be made successively whenever any event listed
above shall occur.
6. COMPLIANCE WITH ACT; TRANSFERABILITY AND NEGOTIABILITY OF WARRANT;
INVESTMENT INTENT.
(a) COMPLIANCE WITH ACT. The Holder, by acceptance hereof agrees
that this Warrant and the Shares to be issued upon the exercise hereof are being
acquired solely for its own account (or a trust account if the Holder is a
trust) and not as a nominee for any other party and not with a view toward the
resale or distribution thereof and that it will not offer, sell or otherwise
dispose of this Warrant or any Shares to be issued upon the exercise hereof
except under circumstances which will not result in a violation of the Act. Upon
the exercise of this Warrant, the Holder shall confirm in writing, in a form
satisfactory to the Company, that the Shares so issued are being acquired solely
for its own account (or a trust account if the Holder is a trust) and not as a
nominee for any other party and not with a view toward resale or distribution
thereof. This Warrant and the Shares to be issued upon the exercise hereof
(unless registered under the Act) shall be imprinted with a legend in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND ARE
"RESTRICTED SECURITIES" AS DEFINED IN RULE 144 PROMULGATED UNDER TEE ACT.
THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE
DISTRIBUTED EXCEPT (i) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SHARES UNDER THE ACT OR (ii) IN COMPLIANCE WITH RULE
144, OR (iii) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE ACT.
In addition, this Warrant and the Shares to be issued upon the exercise
hereof shall bear any legends required by the securities laws of any applicable
states.
Any legend endorsed on a certificate pursuant to this Section 6 shall be
removed, and the Company shall issue a certificate without such legend to the
Holder of such securities if (i) such securities are registered and sold under
the Act and a prospectus meeting, the requirements of Section l0 of the Act is
available, (ii) such securities are sold or may be sold in compliance with Rule
144(k), or (iii) at the request of any holder, if the holder shall have obtained
an opinion of counsel at such holder's expense (which counsel may be counsel to
the Company) reasonably acceptable to the Company to the effect that the
securities proposed to be disposed of may lawfully be so disposed of
4
<PAGE>
without registration, qualification or legend.
(b) NO TRANSFER. Holder will not dispose of any of the Warrants or
the Shares to be issued upon exercise of the Warrants other than (i) in
conjunction with an effective registration statement for the Warrants and/or
Warrant Shares under the Act, (ii) in compliance with Rule 144 promulgated under
the Act or (iii) in compliance with any applicable exemption from registration
under the Act and in compliance with applicable state, local or foreign
securities laws. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144.
(c) KNOWLEDGE AND EXPERIENCE. Holder (i) has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of such Holder's prospective investment in the Warrants and the
Shares to be issued upon exercise of the Warrants; (ii) has the ability to bear
the economic risks of such Holder's prospective investment; (iii) has been
furr1ished with and has had access to such information as such Holder has
considered necessary to make a determination as to the purchase of the Warrants
and the Shares to be issued upon exercise of the Warrants together with such
additional information as is necessary to verify the accuracy of the information
supplied; (iv) has had all questions which have been asked by such Holder
satisfactorily answered by the Company; and (v) has not been offered the
Warrants and the Shares to be issued upon exercise of the Warrants by any form
of advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any such media.
7. REGISTRATION RIGHTS.
(a) DEFINITIONS. For purposes of Section 7:
(i) The terms "register," "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act of 1933, as
amended (the "Act"), and the declaration or ordering of effectiveness of such
registration statement or document;
(ii) The term "Registrable Securities" means (i) the Common
Stock issued to the Holder, and (ii) any Common Stock of the Company issued as
(or issuable upon the conversation or exercise of any warrant right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of such shares of Common Stock, excluding
in all cases, however, any Registrable Securities sold by a person in a
transaction in which his rights under this Section 7 are not assigned; and
(iii) The term "Holder" means any person owning Registrable
Securities or any assignee thereof in accordance with Section 7(k) hereof,
(b) REGISTRATION OF REGISTRABLE SECURITIES. If (but without any
obligation to do so) the Company proposes to register (including for this
purpose a registration effected by the Company
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<PAGE>
for shareholders other than the Holders) any of its stock or other securities
under the Act in connection with the public offering of such securities on or
before March 31, 1998, solely for each (other than a registration relating
solely to the sale of securities to participants in the Company's stock plans or
agreements, or a registration on any form which does not include substantially
the same information as would be required to be included in a registration
statement covering the sale of the Registrable Securities), the Company shall,
at such time, promptly give each Holder written notice of such registration.
Upon the written request of each Holder given within twenty (90) days after
mailing of such notice by the Company, the Company shall, subject to the
provisions of Section 7(h), cause to be registered under the Act all of the
Registrable Securities that each such Holder has requested to be registered;
provided, however, that to participate in such registration a Holder must
request that all Registrable Securities held by such Holder be included in such
registration and provided further that the Holder of at least 50 percent of
shares deemed Registrable Securities join in such request.
(c) OBLIGATIONS OF THE COMPANY. Whenever required pursuant to
Section 7(b) to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:
(i) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for the lesser of (i) one hundred twenty (
120) days, or (i) the period of time in which the Holders of such securities
have effected the distribution of their Registrable Securities.
(ii) 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) 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 Registrable securities owned by them.
(iv) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to quality to do business or to file a general consent
to service of process in any such states or jurisdictions.
(v) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing
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<PAGE>
underwriter of such offering. Each Holder participating in such underwriting
shall also enter into and perform its obligations under such an agreement.
(vi) Notify each Holder of Registrable Securities 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.
(d) FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 7 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
(e) EXPENSES OF COMPANY REGISTRATION. The Company shall bear and pay
all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registration
pursuant to Section 7(b) including (without limitation) all registration, filing
and qualification fees, printers, and accounting fees relating or apportionable
thereto, but excluding, underwriting warrants and commissions relating to
Registrable Securities and any fees or expenses of separate legal counsel for
the Holders.
(f) UNDERWRITING REQUIREMENTS. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 7(b) to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not, due to
marketing factors, jeopardize the success of the offering by the Company. If the
total amount of securities, including Registrable Securities requested by
Holders to be included in such offering, exceeds the amount of securities that
the underwriters determine in their sole discretion is compatible with the
success of the offering, then the Company shall be required to include in the
offering only that number of Registrable Securities which the underwriters
determine in their sole discretion will not jeopardize the success of the
offering (the securities so included to be apportioned pro rata among the
Holders according to the total amount of securities entitled to be included
therein owned by each Holder or in such other proportions as shall mutually be
agreed to by such holders). For purposes of the preceding parenthetical
concerning apportionment for any Holder that is a holder of Registrable
Securities and is a partnership or corporation the partners' retired partners
and shareholders of such holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of 'any of the
foregoing persons shall be deemed to be a single Holder, and any pro rata
reduction with respect to such Holder shall he based upon the aggregate amount
of the shares carrying registration rights owned by all entities and individuals
included in such Holder, as defined in this sentence.
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<PAGE>
(g) WITHDRAWAL RIGHTS AND REALLOCATION. If any Holder disapproves of
the terms of any such underwriting, such Holder may elect to withdraw therefrom
by written notice to the Company and the underwriter. If shares are withdrawn
from registration, or if the number of shares of Registrable Securities was
previously reduced due to marketing factors, the Company shall offer to all
persons retaining the right to include securities in the registration the right
to include additional securities in the registration, with such shares being
allocated on a pro rata basis among the Holders of Registrable Securities.
(h) DELAY OF REGISTRATION. No Holder shall have any right to obtain
or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 7.
(i) INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under this Section 7:
(i) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the officers and directors of each Holder, any
underwriter (as defined in the Act) for such Holder and each person, if any, who
controls such Holder or underwriter within the meaning of the Act or the
Securities Exchange Act of 1934, as amended (the "1934 Act"), against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation") (i) any untrue statement,
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statement therein not misleading, or (iii) any violation
or alleged violation by the Company of the Act, the 1934 Act, any state
securities law or any rule or regulation promulgated under the Act, the 1934 Act
or any state securities laws, and the Company will reimburse each such Holder,
officer or director, underwriter or controlling person for any legal or other
expenses that he or it reasonably incurs in connection with investigating or
defending any such loss, claim, damage, liability, or action provided, however,
that the indemnity agreement contained in this Section 7(1)(i) shall not apply
to amounts paid in settlement of any such loss, claim, damage liability, or
action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be liable in
any such case for any such loss, claim damage, liability, or action to the
extent that it arises out of or is based upon a Violation that results from
reliance upon written information furnished expressly for use in connection with
such registration by any such Holder, officer, director, underwriter or
controlling person.
(ii) To the extent permitted by law each selling Holder will
indemnify and hold harmless the Company, each of its directors each to its
officers who have signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act any underwriter and any
Holder selling securities in such registration statement or any of its directors
or
8
<PAGE>
officers or any person who controls such Holder, against any losses, claims,
damages, or liabilities (joint and several) to which the Company or any such
director, officer, controlling person, or underwriter or controlling person, or
Holder or director, officer or controlling person thereof may become subject,
under the Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or action in respect thereto) arise out
of or are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation results from reliance upon written information
furnished by such Holder expressly for use in connection with such registration;
and each such Holder will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, controlling person
underwriter or controlling person, Holder, officer, director or controlling
person thereof in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this Section 7(i)(ii) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder which consent shall not
be unreasonably withheld. Notwithstanding the foregoing, the liability of each
Holder under this Section 7(i)(ii) shall be limited in an amount equal to the
public offering price of the shares sold by such Holder, unless such liability
arises out of or is based on willful conduct of such Holder.
(iii) Within a reasonable time after receipt by an indemnified
party under this Section 7(i) of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this Section
7(i), deliver to the indemnifying party a written notice of the commencement
hereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the fees and expenses
to be paid by the indemnifying party, if representation of such indemnified
party by the counsel retained by the indemnifying party would be inappropriate
due to actual or potential differing interests between such indemnified party
and any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time of
the commencement of any such action if such failure is prejudicial to the
indemnifying party, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 7(i); but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section
7(i).
(iv) The obligations of the Company and Holders under this
Section 7(i) shall survive the completion of any offering of Registrable
Securities in a registration statement under this Warrant and otherwise.
(j) REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to
make available to the Holders the benefits of Rule 144 promulgated under the Act
and any other rule or regulation of the SEC that may at any time permit a Holder
to sell securities of the Company to the public without registration the Company
agrees to:
9
<PAGE>
(i) make and keep public information available, as those terms
are understood and defined in SEC Rule 144,
(ii) file with the SEC in a timely manner all reports required
of the Company under the Act and the 1934 Act; and
(iii) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has compiled with the reporting requirements of SEC Rule 144
(ii) a copy of the most recent annual or quarterly report of the Company and
(iii) such other information as may be reasonably requested in availing any
Holder of any rule or regulation of the SEC which permits the selling of any
such securities without registration or pursuant to such form.
(k) ASSIGNMENT OF REGISTRATION RIGHTS. The rights to register
Registrable Securities pursuant to this Section 7 may be assigned by a Holder to
a transferee or assignee who acquires the Warrant held by the Holder or all of
the Registrable Securities then held by such Holder, provided, in either case,
the Company is, within a reasonable time prior to such transfer, furnished with
written notice of the name and address of such proposed transferee or assignee
and the securities with respect to which such registration rights are being
assigned; and provided further that the transferee or assignee of such rights is
approved by the Board of Directors of the Company, which approval shall not be
withheld for purposes of this Section 7, unless the Board of Directors
determines that the transfer or assignment of such rights to the proposed
transferee or assignee is not in the best interests of the Company; and
provided, further, that such assignment shall be effective only if immediately
following such transfer the further disposition of such securities by the
transferee or assignee is restricted under the Act and the transferee enters
into a written agreement providing that such transferee shall be bound by the
provisions of Section 7 of this Warrant.
(l) LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after
the date of this Warrant, the Company shall not, without the prior written
consent of the Holders of a majority of the outstanding Registrable Securities,
enter into any agreement with any holder or prospective holder of any securities
of the Company that would allow such holder or prospective holder to include
such securities in any registration under Section 7(b) hereof (unless the terms
of such agreement give pro rata treatment to the Holders in the event of any
cutback by the underwriter).
(m) "MARKET STAND-OFF" WARRANT. Each Holder hereby agrees that it
shall not, to the extent and during the period of duration specified by the
Company and an underwriter of common stock (or other securities) of the Company,
which period shall not exceed one hundred eighty (180) days, sell or otherwise
transfer or dispose of (other than to transferees who agree to be similarly
bound) any registrable Securities after the effective date of registration
statement of the Company filed under the Act; provided, however, that all
officers and directors of the Company and all other persons with registration
rights (whether or not pursuant to this Warrant) enter into similar agreements.
In order to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Registrable Securities of each Holder (and the
shares or securities of
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every other person subject to the foregoing restriction) until the end of such
one hundred eighty (180) day period.
(n) TERMINATION OF COMPANY'S OBLIGATIONS. The rights to register
securities granted the Holder pursuant to Section 7(b) shall terminate as to any
Holder whose Warrant (i) terminates, (ii) on December 31, 1997, and, in any
event (iii) as to any Holder who can sell his/her/its Warrant Shares under the
provisions of Rule 144(k) or any other applicable exemption from registration.
8. RIGHTS OF HOLDERS. No Holder shall be entitled to vote or receive
dividends or be deemed the holder of Shares or any other securities of the
Company which may at any time be issuable on the exercise of this Warrant for
any purpose, nor shall anything contained herein be construed to confer upon the
Holder, as such, any of the rights of a shareholder of the Company or any right
to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, consolidation, merger, transfer of assets or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until this Warrant shall have been exercised
and the Shares issuable upon exercise hereof shall have become deliverable, as
provided herein. The Company shall provide to the Holder all notices and other
information which it provides to its stockholders.
9. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, on delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company or, in the
case of mutilation, on surrender and cancellation of this Warrant, the Company
at its expense shall execute and deliver, in lieu of this Warrant, a new warrant
of like tenor.
10. EXCHANGE OF WARRANT. Subject to the other provisions of this Warrant,
on surrender of this Warrant for exchange, properly endorsed and subject to the
provisions of this Warrant with respect to compliance with the Act, the Company
at its expense shall issue to the Holder a new warrant or warrants of like
tenor. in the name of the Holder or as the Holder (on payment by the Holder of
any applicable transfer taxes) may direct, for the number of Shares issuable
upon exercise thereof.
11. GOVERNING LAW. This Agreement shall be governed in all respects by the
laws of the State of Colorado as such laws are applied to agreements between
Colorado residents entered into and to be performed entirely within Colorado.
12. SURVIVAL. The representations warranties, covenants and agreements
made herein shall survive the execution of this Agreement and the closing of the
transactions contemplated hereby.
13. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs,
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executors and administrators of the parties hereto.
14. NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be sent by facsimile,
overnight courier or mailed by certified or registered mail, postage prepaid,
return receipt requested, to the facsimile number or address shown on the
signature pages to this Agreement or to such other facsimile number or address
provided to the parties to this Agreement in accordance with this Section 10.5.
Such notices or other communications shall be deemed received upon receipt of a
confirmation of facsimile receipt or three (3) days after deposit in the mails.
15. SEVERABILITY. In case any provision of this Agreement shall be
declared invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
16. TITLES AND SUBTITLES. The titles of the sections of this Agreement are
for convenience of reference only and are not to be considered in construing
this Agreement.
17. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
DATED: June 19, 1997
DCX INC., a Colorado corporation
By: STEPHEN CARREKER
Stephen Carreker, President
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ACCEPTANCE OF WARRANT
The undersigned hereby accepts this Warrant and agrees to abide by all the
terms and conditions hereof. The undersigned further represents and agrees that
it is accepting this Warrant for its own account for investment purposes and not
with a view to or for sale in connection with a distribution of the Warrant or
the Warrant Shares. The undersigned further affirms the representations
contained in Section 7 of the Warrant.
WARRANT HOLDER:
SPENCER EDWARDS, INC.
By: EDWARD H. PRICE
Name: EDWARD H. PRICE
Title: PRESIDENT
Date: JUNE 19, 1997
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EXHIBIT A
NOTICE OF EXERCISE
TO: DCX, INC:
1. The undersigned Holder of the attached original, executed Common Stock
Purchase Warrant hereby elects to exercise its purchase right under such Warrant
with respect to Shares. as defined in the Warrant, of DCX, INC.
2. The undersigned Holder elects to pay the aggregate Warrant Price for
such Shares (the "Exercise Shares") in the following manner:
[ ] by the enclosed cash or check made payable to the Company in
the amount
of $ , or
---------
[ ] by wire transfer of United States funds to the account of
the Company in the amount of $ , which transfer has
----------
been made before or simultaneously with the delivery of this
Notice pursuant to the instructions of the Company.
3. Please issue a stock certificate or certificates representing the
appropriate number of Shares in the name of the undersigned or in such other
names as is specified below.
Name:
-----------------------------
Address:
----------------------------------
Tax Identification No.:
-----------
HOLDER:
By:
--------------------------------------
Dated: Title:
------------------------ -----------------------------------
14
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS
AND UNTIL REGISTERED UNDER THE SECURITIES ACT OR UNLESS AN EXEMPTION THEREFROM
IS AVAILABLE.
WARRANT TO PURCHASE
COMMON STOCK OF DCX, INC.
This certifies that CORETECH LTD. (the "Holder"), for value received, is
entitled to purchase from DCX, INC. (the "Company") Thirty Six Thousand Two
Hundred Eighty One (36,281) shares of the Company's Common Stock (the "Common
Stock") for a per share exercise price equal to $1.875 (the "Per Share Exercise
Price"). This right may be exercised at any time from the date hereof up to and
including 5:00 p.m. (New York City time) on the second anniversary of the date
hereof (the "Expiration Date"), upon surrender to the Company at its principal
office (or at such other location as the Company may advise the Holder in
writing) of this warrant, properly endorsed, with the Subscription Form attached
hereto duly filled in and signed and, if applicable, upon payment in cash or by
check of the aggregate Per Share Exercise Price for the number of shares for
which this warrant is being exercised determined in accordance with the
provisions hereof.
1. ISSUANCE OF CERTIFICATES.
Certificates for the shares of Common Stock acquired upon exercise of this
warrant, together with any other securities or property to which the Holder is
entitled upon such exercise, will be delivered to the Holder by the Company at
the Company's expense within a reasonable time after this warrant has been so
exercised. Each stock certificate so delivered will be in such denominations of
Common Stock as may be requested by the Holder and will be registered in the
name of the Holder. In case of a purchase of less than all the shares that may
be purchased under this warrant, the Company will cancel this warrant and
execute and deliver a new warrant or warrants of like tenor for the balance of
the shares purchasable under this warrant to the Holder within a reasonable time
after surrender of this warrant.
2. SHARES FULLY-PAID, NONASSESSABLE, ETC.
All shares of Common Stock issued upon exercise of this warrant will, upon
issuance, be duly authorized, validly issued, fully-paid and nonassessable and
free from all preemptive rights of any shareholder and free of all taxes, liens
and charges with respect to the issue thereof. The Company will at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the exercise of this warrant, such
number of its shares of Common Stock as from time to time are sufficient to
effect the full exercise of this warrant. If at any time the number of
authorized but unissued shares of Common Stock is not sufficient to effect the
full exercise of this warrant, the Company will take such corporate action as
may, in the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as is sufficient for
such purpose. The Company will take all such action as may be necessary to
assure that such securities may be issued as provided herein without violation
of any applicable law or regulation, or of any requirements of any domestic
securities exchange upon which the Common Stock may be listed; provided,
however, that the Company will not be required to effect a registration under
Federal or state
-1-
<PAGE>
securities laws with respect to such exercise (except as may be set forth in a
separate written agreement between the Company and the Holder).
3. NET ISSUE EXERCISE.
Notwithstanding any provisions herein to the contrary, if the fair market
value of one share of the Company's Common Stock is greater than the Per Share
Exercise Price (at the date of calculation as set forth below), in lieu of
exercising this warrant for cash, the Holder may elect to receive shares equal
to the value (as determined below) of this warrant (or the portion thereof being
canceled) by surrender of this warrant at the principal office of the Company,
together with the properly endorsed Subscription Form and notice of such
election, in which event the Company will issue to the Holder a number of shares
of Common Stock computed using the following formula:
X = Y (A-B)
A
Where X = the number of shares of Common Stock to be issued to the Holder
Y = the number of shares of Common Stock purchasable under
this warrant or, if only a portion of this warrant is being
exercised, the portion of this warrant being canceled (at
the date of such calculation)
A = the fair market value of one share of the Company's
Common Stock (at the date of such calculation)
B = Per Share Exercise Price (as adjusted to the date of such
calculation)
For purposes of the above calculation, fair market value of one share of Common
Stock will be the Closing Bid Price as of the close of business on the trading
day prior to the date the completed, executed Subscription Form is received.
4. ADJUSTMENTS.
4.1 ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the Company at any time
or from time to time during the term of this warrant effects a subdivision of
the outstanding Common Stock, the Per Share Exercise Price in effect immediately
before that subdivision will be proportionately decreased. Conversely, if the
Company at any time or from time to time during the term of this warrant
combines the outstanding shares of Common Stock into a smaller number of shares,
the Per Share Exercise Price in effect immediately before the combination will
be proportionately increased. Any adjustment under this Section 4.1 will become
effective at the close of business on the date the subdivision or combination
becomes effective.
4.2 ADJUSTMENT FOR COMMON STOCK DIVIDENDS AND DISTRIBUTIONS. If the Company
at any time or from time to time during the term of this warrant makes, or
fixes, a record date for the determination of holders of Common Stock entitled
to receive a dividend or other distribution payable in additional shares of
Common Stock, in each such event the Per Share Exercise Price that is then in
effect will be decreased as of the time of such issuance or, in the event such
record date is fixed, as of the close
-2-
<PAGE>
of business on such record date, by multiplying the Per Share Exercise Price
then in effect by a fraction (a) the numerator of which is the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance on the close of business on such record date, and (b) the
denominator of which is the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance on the close of
business on such record date plus the number of shares of Common Stock issuable
in payment of such dividend or distribution; provided, however, that if such
record date is fixed and such dividend is not fully paid or if such distribution
is not fully made on the date fixed therefor, the Per Share Exercise Price will
be recomputed accordingly as of the close of business on such record date and
thereafter the Per Share Exercise Price will be adjusted pursuant to this
Section 4.2 to reflect the actual payment of such dividend or distribution.
4.3 ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. If the Company at any
time or from time to time during the term of this warrant makes, or fixes a
record date for the determination of holders of Common Stock entitled to receive
a dividend or other distribution payable in securities of the Company other than
shares of Common Stock, in each such event provision will be made so that the
Holder will receive upon exercise of this warrant, in addition to the number of
shares of Common Stock receivable thereupon, the amount of other securities of
the Company that it would have received had this warrant been exercised on the
date of such event and had it thereafter, during the period from the date of
such event to and including the exercise date, retained such securities
receivable by them as aforesaid, subject to all other adjustments called for
during such period under this Section 4 with respect to the rights of the Holder
hereunder or with respect to such other securities by their terms.
4.4 ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE AND SUBSTITUTION. If at any
time or from time to time during the term of this warrant the Common Stock
issuable upon the exercise of this warrant is changed into the same or a
different number of shares of any class or classes of stock, whether by
recapitalization, reclassification or otherwise (other than a recapitalization,
subdivision, combination, reclassification or exchange provided for elsewhere in
this Section 4), the Holder will have the right thereafter to exercise this
warrant for the kind and amount of stock and other securities and property
receivable upon such recapitalization, reclassification or other change into
which the shares of Common Stock issuable upon exercise of this warrant
immediately prior to such recapitalization, reclassification or change could
have been converted, all subject to further adjustment as provided herein or
with respect to such other securities or property by the terms thereof.
4.5 REORGANIZATIONS. If at any time or from time to time during the term of
this warrant there is a capital reorganization of the Common Stock (other than a
recapitalization, subdivision, combination, reclassification or exchange
provided for elsewhere in this Section 4), as a part of such capital
reorganization, provision will be made so that the Holder will thereafter be
entitled to receive upon exercise of this warrant the number of shares of stock
or other securities or property of the Company to which a holder of the number
of shares of Common Stock deliverable upon exercise of this warrant would have
been entitled on such capital reorganization, subject to adjustment in respect
of such stock or securities by the terms thereof.
4.6 CERTIFICATE OF ADJUSTMENT. In each case of an adjustment or
readjustment of the number of shares issuable upon exercise of this warrant or
the Per Share Exercise Price, the Company, at its expense, will compute such
adjustment or readjustment in accordance with the provisions hereof and prepare
a certificate showing such adjustment or readjustment, and will mail such
certificate, by first class mail, postage prepaid, to the Holder at the Holder's
address as shown in the Company's books. The
-3-
<PAGE>
certificate will set forth such adjustment or readjustment, showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (1) the Per Share Exercise Price at the time in effect, and (b) the
type and amount, if any, of other property that at the time would be received
upon exercise of this warrant.
4.7 NOTICES OF RECORD DATE. Upon (a) any taking by the Company of a record of
the holders of any class of securities for the purpose of determining the
holders thereof who are entitled to receive any dividend or other distribution,
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company, any sale of all or
substantially all of the assets of the Company or any voluntary or involuntary
dissolution, liquidation or winding up of the Company or (c) a proposed Sale
Event, the Company will mail to the Holder at least twenty (20) days prior to
the record date specified therein a notice specifying (1) the date on which any
such record is to be taken for the purpose of such dividend or distribution and
a description of such dividend or distribution, (2) the date on which any such
reorganization, reclassification, recapitalization, asset sale, dissolution,
liquidation or winding up is expected to become effective, and (3) the date, if
any, that is to be fixed as to when the holders of record of Common Stock (or
other securities) will be entitled to exchange their shares of Common Stock (or
other securities) for securities or other property deliverable upon such
reorganization, reclassification, recapitalization, asset sale, dissolution,
liquidation or winding up.
5. TAXES.
The Company will pay all taxes (other than taxes based upon income) and other
governmental charges that may be imposed with respect to the issue or delivery
of shares of Common Stock upon exercise of this warrant, excluding any tax or
other charge imposed in connection with any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that in which this
warrant was registered.
6. CLOSING OF BOOKS.
The Company will at no time close its transfer books against the transfer of
any warrant or of any shares of Common Stock issued or issuable upon the
exercise of any warrant in any manner that interferes with the timely exercise
of this warrant.
7. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY.
Nothing contained in this warrant will be construed as conferring upon the
Holder the right to vote or to consent or to receive notice as a shareholder of
the Company or any other matters or any rights whatsoever as a shareholder of
the Company. No dividends or interest will be payable or accrued in respect of
this warrant or the interest represented hereby or the shares purchasable
hereunder until, and only to the extent that, this warrant has been exercised.
8. WARRANTS TRANSFERABLE.
Subject to compliance with applicable Federal and state securities laws and
the restrictions imposed by any other written agreement between the Holder and
the Company, this warrant and all rights hereunder are transferable, in whole or
in part, without charge to the Holder (except for transfer taxes), upon
surrender of this warrant properly endorsed and in compliance with the
provisions of this warrant.
-4-
<PAGE>
9. MODIFICATION AND WAIVER.
This warrant and any provision hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of the same is sought.
10.NOTICES.
Any notice required by the provisions of this warrant will be in writing and
will be deemed effectively given: (a) upon personal delivery to the party to be
notified; (b) when sent by confirmed telex or facsimile if sent during normal
business hours of the recipient; if not, then on the next business day; (c) five
(5) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid; or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All notices will be addressed to the Holder at the
address of the Holder appearing on the books of the Company.
11.LOST WARRANTS.
The Company represents and warrants to the Holder that upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction,
or mutilation of this warrant and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to the
Company, or in the case of any such mutilation upon surrender and cancellation
of such warrant, the Company, at its expense, will make and deliver a new
warrant, of like tenor, in lieu of the lost, stolen, destroyed or mutilated
warrant.
12.FRACTIONAL SHARES.
No fractional shares of Common Stock will be issued upon exercise of this
warrant. If the conversion would result in the issuance of any fractional share,
the Company will, in lieu of issuing any fractional share, pay cash equal to the
product of such fraction multiplied by the closing bid price of the Company's
Common Stock on the date of conversion.
13.GOVERNING LAW.
This warrant will be construed and enforced in accordance with, and the
rights of the parties will be governed by, the laws of the State of Colorado
without regard to conflict of laws principles.
-5-
<PAGE>
The Company has executed this warrant as of this 8th day of November, 1996.
DCX, INC.
By: /S/ FREDERICK G. BEISSER
Frederick G. Beisser
Secretary and Chief Financial Officer,
duly authorized by the Board of
Directors
CORETECH LTD.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
-6-
<PAGE>
EXHIBIT A TO WARRANT
SUBSCRIPTION FORM
Date:
-------------------
DCX, INC.
3002 North State Highway 83
Franktown, CO 80116-0569
Attn: President
Ladies and Gentlemen:
The undersigned hereby elects to exercise the warrant issued to it by DCX,
INC. (the "Company") dated as of and to purchase thereunder
------------
( ) shares of the Common Stock of the Company at a
- ---------------------- -------
purchase price of ($ ) per Share, for an
---------------------- -------------
aggregate purchase price of ($ ) (the
---------------------- ---------------
"Purchase Price").
Pursuant to the terms of the warrant the undersigned has delivered the
Purchase Price herewith in full in cash or by certified check or wire transfer.
The undersigned also makes the representations set forth on the attached Exhibit
B of the warrant.
Very truly yours,
-----------------------------------------
By:
--------------------------------------
Title:
-----------------------------------
-1-
<PAGE>
EXHIBIT B TO WARRANT
INVESTMENT REPRESENTATIONS
THIS AGREEMENT MUST BE COMPLETED, SIGNED AND RETURNED TO DCX, INC. CORP.
ALONG WITH THE SUBSCRIPTION FORM BEFORE THE COMMON STOCK ISSUABLE UPON
EXERCISE OF THE WARRANT WILL BE ISSUED.
, 199
------------------- ---
DCX, Inc.
3002 North State Highway 83
Franktown, CO 80116-0569
Attention: President
The undersigned, ("Purchaser"), intends to acquire up to
----------------
shares of the Common Stock (the "Stock") of DCX, INC. (the "Company") from
- -----
the Company pursuant to the exercise of certain warrants to purchase Stock held
by Purchaser. The Stock will be issued to Purchaser in a transaction not
involving a public offering and pursuant to an exemption from registration under
the Securities Act of 1933, as amended (the "1933 Act"), and applicable state
securities laws. In connection with such purchase and in order to comply with
the exemptions from registration relied upon by the Company, Purchaser
represents, warrants and agrees as follows:
Purchaser is acquiring the Stock for its own account, to hold for investment,
and Purchaser will not make any sale, transfer or other disposition of the Stock
in violation of the 1933 Act or the General Rules and Regulations promulgated
thereunder by the Securities and Exchange Commission (the "SEC") or in violation
of any applicable state securities law.
Purchaser has been informed that under the 1933 Act, the Stock must be held
indefinitely unless it is subsequently registered under the 1933 Act or unless
an exemption from such registration (such as Rule 144) is available with respect
to any proposed transfer or disposition by Purchaser of the Stock. Purchaser
further agrees that the Company may refuse to permit Purchaser to sell, transfer
or dispose of the Stock (except as permitted under Rule 144) unless there is in
effect a registration statement under the 1933 Act and any applicable state
securities laws covering such transfer, or unless Purchaser furnishes an opinion
of counsel reasonably satisfactory to counsel for the Company, to the effect
that such registration is not required.
Purchaser also understands and agrees that there will be placed on the
certificate(s) for the Stock, or any substitution therefor, legends stating in
substance:
"These securities have not been registered under the Securities Act of 1933.
They may not be sold, offered for sale, pledged, or hypothecated in the absence
of an effective registration statement as to the securities under said act or an
opinion satisfactory to the Company that registration is not required."
-1-
<PAGE>
Purchaser has carefully read this letter and has discussed its requirements
and other applicable limitations upon Purchaser's resale of the Stock with
Purchaser's counsel.
Very truly yours,
-------------------------------------------
By:
----------------------------------------
Title:
-------------------------------------
-2-
WARRANT AGREEMENT
1. A warrant (the "Warrant") to acquire 74,033 shares (hereinafter
referred to as "Shares") of the no par value Common Stock of DCX, Inc. (the
"Company") is hereby granted to;
SKB CORPORATION (hereinafter referred to as the "Holder"),
(Name of warrant holder)
c/o Richard Cornish, Esq.
9250 East Costilla Ave., Ste. 600
ENGLEWOOD, CO 80112
(Street, city, state and zip code)
subject in all respects to the terms and conditions as are set forth herein.
2. Certificates for the shares of Common Stock acquired upon exercise of
this Warrant Agreement (the "Agreement") will be delivered to the Holder by the
Company at the Company's expense within a reasonable time after this Warrant has
been so exercised. Each stock certificate so delivered will be in such
denominations of Common Stock as may be requested by the Holder and will be
registered in the name of the Holder.
3. All shares of Common Stock issued upon exercise of this warrant will,
upon issuance, be duly authorized, validly issued, fully-paid and nonassessable
and free from all preemptive rights of any shareholder and free of all taxes,
liens and charges with respect to the issue thereof. The Company will at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the exercise of this Warrant,
such number of its shares of Common Stock as from time to time are sufficient to
effect the full exercise of this Warrant. The Company will take all such action
as may be necessary to assure that such securities may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Common Stock may
be listed.
4. The Warrant exercise price as determined by the Board of Directors of
the Company (the "Board") is $1.3929 per share.
5. This Warrant may not be exercised after July 31, 1998 and may be
exercised in whole or in part at any time during such term, in accordance with
the terms and conditions set forth herein.
6. The Warrant may be exercised by delivering to the Treasurer of the
Company:
a. A Warrant Exercise Notice, substantially in the form attached,
specifying the number of Shares to be purchased; and
-1-
<PAGE>
b. Full payment of the Warrant exercise price for the underlying shares
to be purchased, in the form of a written cancellation by Holder of
accounts payable by the Company to Holder.
7. The Holder, by acceptance hereof, agrees that this Warrant and the
Shares to be issued upon exercise hereof are being acquired for investment and
that it will not offer, sell or otherwise dispose of this Warrant or any Shares
to be issued upon exercise hereof unless pursuant to the registration of such
resale or an exemption therefrom under the Securities Act of 1933, as amended
(the "Act"). Upon exercise of this Warrant, the Holder shall, if requested by
the Company, confirm in writing, in a form satisfactory to the Company, that the
Shares so purchased are being acquired for investment and not with a view toward
distribution or resale unless pursuant to the registration of such resale or an
exemption therefrom under the Act. This Warrant and all Shares issued upon
exercise of this Warrant (unless registered under the Act) shall be stamped or
imprinted with a legend substantially in the following form:
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
THE REGISTRATION PROVISIONS OF SUCH ACT HAVE BEEN COMPLIED WITH OR UNLESS
THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT THE PROPOSED TRANSACTION WILL NOT VIOLATE FEDERAL OR STATE SECURITIES
LAWS.
8. Subject to the provisions of Section 7, this Warrant is exchangeable,
without expense, at the option of the Holder, upon presentation and surrender
hereof to the Company, for other warrants of different denominations, entitling
the Holder or Holders thereof to purchase in the aggregate the same number of
Shares purchasable hereunder. Upon surrender of this Warrant to the Company with
funds sufficient to pay any transfer tax, the Company shall, without charge,
execute and deliver a new Warrant in the name of the assignee designated in
writing to the Company by Holder and this Warrant shall promptly be canceled.
9. Governing Law. This Agreement will be construed and enforced in
accordance with, and the rights of the parties will be governed by, the laws of
the State of Colorado without regard to conflict of laws principals.
Issue Date: October 10, 1997
DCX, Inc.
By: Frederick G. Beisser
Vice President - Finance & Administration
and Secretary
-2-
<PAGE>
DEBT CANCELLATION AND WARRANT EXERCISE NOTICE
The undersigned hereby notifies DCX, Inc. (the "Company") of its election to
exercise its warrant to purchase 74,033 shares of Company Common Stock.
This Notice also constitutes payment in full of the amount of $103,120.88 by
virtue of the Holder's cancellation hereby of a debt owed by the Company to
Holder in the amount of $103,120.88, for this exercise at the warrant exercise
price of $1.3929 per share. In delivering this Notice, Holder confirms and
warrants to the Company Holder's due execution and authorization hereof by all
necessary corporate action of Holder, and the enforceability by the Company of
this Notice against Holder without qualification as evidence of the satisfaction
and payment in full of all obligations of and amounts due by the Company to
Holder, subject to the Company's performance of its obligations under the
Warrant Agreement dated October 10, 1997, and the registration of the shares by
the Company for resale under the Securities Act of 1933.
The undersigned agrees with all the provisions of the Warrant Agreement dated
October 10, 1997.
For: SKB Corporation
- ------------------------------------------
(Signature of Holder exercising)
C/O 9250 E. COSTILLA AVE., STE. 600
- -------------------------------------------
(address of Holder)
ENGLEWOOD, CO 80112
- -------------------------------------------
(city, state and zip code)
-3-
<PAGE>
AGREEMENT OF THE HOLDER
The Holder acknowledges the receipt of the Warrant Agreement dated October 10,
1997, and represents to DCX, Inc. that it understands the terms and conditions
set forth therein and accepts the same.
For: SKB Corporation
By:
---------------------------------------
(Signature of Holder's Officer)
C/O 9250 E. COSTILLA AVE., STE. 600
- ------------------------------------------
(address)
ENGLEWOOD, CO 80112
- ------------------------------------------
(city, state and zip code)
-4-
WARRANT AGREEMENT
1. A warrant (the "Warrant") to acquire 97,500 shares (hereinafter
referred to as "Shares") of no par value Common Stock of DCX, Inc. (the
"Company") is hereby granted to;
GERALD ALEXANDER (hereinafter referred to as the "Holder"),
(Name of warrant holder)
subject in all respects to the terms and conditions as are set forth herein.
2. Certificates for the shares of Common Stock acquired upon exercise of
this Warrant Agreement (the "Agreement") will be delivered to the Holder by the
Company at the Company's expense within a reasonable time after this Warrant has
been so exercised. Each stock certificate so delivered will be in such
denominations of Common stock as may be requested by the Holder and will be
registered in the name of the Holder.
3. All shares of Common Stock issued upon exercise of this warrant will,
upon issuance, be duly authorized, validly issued, fully-paid and nonassessable
and free from all preemptive rights of any shareholder and free of all taxes,
liens and charges with respect to the issue thereof. The Company will at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the exercise of this
Agreement, such number of its shares of Common Stock as from time to time are
sufficient to effect the full exercise of this Agreement. The Company will take
all such action as may be necessary to assure that such securities may be issued
as provided herein without violation of any applicable law or regulation, or of
any requirements of any domestic securities exchange upon which the Common Stock
may be listed.
4. The Warrant exercise price as determined by the Board of Directors of
the Company (the "Board") is $1.875 per share.
5. This Warrant may not be exercised after August 1, 2000 and may be
exercised in whole or in part at any time during such term, in accordance with
the terms and conditions set forth herein.
6. The Warrant may be exercised by delivering to the Treasurer of the
Company:
a. A Notice and Agreement of Exercise of Warrant, substantially in the
form attached, specifying the number of Warrant Shares to be
purchased.
b. Full payment of the Warrant price for the underlying shares to be
purchased in the form of a written cancellation by Holder of
accounts payable by the Company to Holder for the full amount of the
exercise price.
7. COMPLIANCE WITH SECURITIES ACT. The Holder of this Warrant, by
acceptance hereof, agrees that this Warrant and the shares of Common Stock to be
issued upon exercise hereof are being acquired for investment and that it will
not offer, sell or otherwise dispose of this Warranty or any shares of Common
Stock to be issued upon exercise hereof except under
<PAGE>
circumstances which will not result in a violation of the Securities Act of
1933, as amended (the "Act"). Upon exercise of this Warrant, the Holder hereof
shall, if requested by the company, confirm in writing, in a form satisfactory
to the Company, that the shares of Common Stock so purchased are being acquired
for investment and not with a view toward distribution or resale. This Warrant
and all shares of Common Stock issued upon exercise of this Warrant (unless
registered under the Act) shall be stamped or imprinted with a legend
substantially in the following form:
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
THE REGISTRATION PROVISIONS OF SUCH ACT HAVE BEEN COMPLIED WITH OR UNLESS
THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT THE PROPOSED TRANSACTION WILL NOT VIOLATE FEDERAL OR STATE SECURITIES
LAWS.
8. Subject to the provisions of Section 8, this Warrant is exchangeable,
without expense, at the option of the Holder, upon presentation and surrender
hereof to the Company or at the office of its stock transfer agent, if any, for
other warrants of different denominations, entitling the Holder or Holders
thereof to purchase in the aggregate the same number of Shares purchasable
hereunder. Upon surrender of this Warrant to the Company or at the office of its
stock transfer agent, if any, and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant in the name of
the assignee designated in writing by Holder and this Warrant shall promptly be
canceled. This Warrant may be divided or combined with other Warrants that carry
the same rights upon presentation hereof at the office of the Company or at the
office of its stock transfer agent, if any, together with a written notice
specifying the names and denominations in which new Warrants are to be issued
and signed by the Holder hereof.
9. Governing Law. This Agreement will be construed and enforced in
accordance with, and the rights of the parties will be governed by, the laws of
the State of Colorado without regard to conflict of laws principals.
Issue Date: October 24, 1997
DCX, Inc.
-----------------------------------------------
By: Frederick G. Beisser
Vice President - Finance & Administration
and Secretary
-2-
<PAGE>
WARRANT EXERCISE NOTICE
The undersigned hereby notifies DCX, Inc. (the "Company") of its election to
exercise its warrant to purchase 97,500 shares of Company Common Stock.
Accompanying this notice is payment in the amount of $ in payment
---------------
for this exercise at the warrant exercise price of $1.875 per share.
The undersigned agrees with all the provisions of the Warrant Agreement dated
October 24, 1997.
For: Gerald Alexander
- -------------------------------------
(Signature of Holder exercising)
- -------------------------------------
(address of Holder)
- -------------------------------------
(city, state and zip code)
-3-
<PAGE>
AGREEMENT OF THE HOLDER
The Holder acknowledges the receipt of the Warrant Agreement, and represents to
DCX, Inc. that it understands the terms and conditions set forth therein and
accepts the same.
For: Gerald Alexander
By:
----------------------------------
(Signature of Holder's Officer)
- -------------------------------------
(address)
- -------------------------------------
(city, state and zip code)
-4-
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
DCX, Inc.
Golden, Colorado
We hereby consent to the incorporation by reference in the Prospectus and
this Registration Statement of our report dated January 9, 1997, relating to the
consolidated financial statements of DCX, Inc. appearing in the Company's Annual
Report on Form 10-KSB for the year ended September 30, 1996.
BDO Seidman, LLP
Denver, Colorado
November 5, 1997
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the use in this Registration Statement of DCX, Inc. on Form
S-3 of our report dated August 26, 1997 on the financial statements of
PlanGraphics, Inc. for the nine months ended September 30, 1996 and the year
ended December 31, 1995 incorporated by reference into the Registration
STatement and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
/s/Eskew & Gresham, PSC
Eskew & Gresham, PSC
Certified Public Accountants
Lexington, Kentucky
November 5, 1997
