Dynaresource, Inc 8-K, filed Sep 2, 2026
Dynaresource, Inc. (DYNR)
8-K
2026-09-02
For: 2026-09-01
View Original
Added on
September 02, 2026
About this 8-K
Dynaresource, Inc filed this 8-K on September 2, 2026, reporting on events of September 1, 2026.
Items reported
- Item 1.01: Entered into a material agreement
- Item 3.02: Unregistered sale of equity
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On September 1, 2026, DynaResource, Inc. (the “Company”) entered into privately negotiated Securities Purchase Agreements (each a “Purchase Agreement” and collectively the “Purchase Agreements”) with each of Golden Post Rail, LLC (“Golden Post”), Ocean Partners UK Limited (“Ocean Partners”), Gareth Nichol (“Nichol”), Jay Redlingshafer, Smith First Family L.P., Dale Petrini, and Doug Metcalf (collectively the “Purchasers”), pursuant to which Purchasers acquired an aggregate of 6,666,666 units of securities (the “Units”) from the Company at a purchase price of $0.45 per Unit, resulting in aggregate sales proceeds of $3,000,000 (the “Offering”). The Units are comprised of 6,666,666 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), and warrants to purchase 6,666,666 shares of Common Stock (the “Warrants”) at an exercise price of $0.51 per share. The exercise of the Warrants is conditioned upon the Company obtaining stockholder approval and filing with the Delaware Secretary of State of an amendment to its Amended and Restated Certificate of Incorporation (the “Amendment”) to either (i) increase the Company’s authorized shares of Common Stock or (ii) effect a reverse stock split of the Common Stock such that the Company has sufficient authorized shares of Common Stock to accommodate the exercise of the Warrants and satisfy its existing share reserve requirements under the Company’s outstanding derivative securities, equity awards, and equity incentive plans (the “Authorized Shares Condition”). Consistent with the foregoing, the Warrants are exercisable commencing on the date of satisfaction of the Authorized Shares Condition and continuing until the later of 180 days from the issuance date of the Warrants and 30 days after the date the Authorized Shares Condition is satisfied. In connection with, and as a condition to the closing of the Offering, Golden Post, Ocean Partners, and Nichol entered into voting agreements with the Company pursuant to which they each agreed to vote any and all shares entitled to vote on the Amendment in favor of the Amendment (the “Voting Agreements”).
In connection with the Offering, (i) Golden Post waived certain preemptive and antidilution rights that would otherwise have been triggered by Offering, and (ii) certain stockholders of the Company (A) waived the reservation requirements applicable to certain derivative securities held by such stockholders, and (B) covenanted not to exercise or convert, as applicable, any such derivative securities, for a period of 120 days following the date of closing of the Offering or, if earlier, the date of satisfaction of the Authorized Shares Condition.
The foregoing summary is qualified in its entirety by reference to the full text of the Purchase Agreements, Warrants, and Voting Agreements, copies of which are attached hereto as Exhibits 10.1-10.17, respectively, and incorporated herein in their entirety by reference. The foregoing agreements contain customary representations, warranties and covenants, which were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties.
Item 3.02 Unregistered Sales of Equity Securities.
As discussed in Item 1.01, which is incorporated herein by reference, pursuant to the Purchase Agreements, on September 1, 2026 the Company sold 6,666,666 Units to the Purchasers for a total purchase price of $3,000,000, at a price of $0.45 per Unit, in privately negotiated transactions exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(2). The Units are comprised of 6,666,666 shares of Common Stock and Warrants to purchase 6,666,666 shares of Common Stock at an exercise price of $0.51 per share.
Item 9.01 Financial Statements and Exhibits.
d)
Exhibits
Exhibit No. |
Description |
10.1 |
Securities Purchase Agreement dated September 1, 2026 by and between DynaResource, Inc. and Golden Post Rail, LLC. |
10.2 |
Securities Purchase Agreement dated September 1, 2026 by and between DynaResource, Inc. and Ocean Partners UK Limited. |
10.3 |
Securities Purchase Agreement dated September 1, 2026 by and between DynaResource, Inc. and Gareth Nichol. |
10.4 |
Securities Purchase Agreement dated September 1, 2026 by and between DynaResource, Inc. and Jay Redlingshafer. |
10.5 |
Securities Purchase Agreement dated September 1, 2026 by and between DynaResource, Inc. and Smith First Family L.P. |
10.6 |
Securities Purchase Agreement dated September 1, 2026 by and between DynaResource, Inc. and Doug Metcalf. |
10.7 |
Securities Purchase Agreement dated September 1, 2026 by and between DynaResource, Inc. and Dale Petrini. |
10.8 |
Warrant dated September 1, 2026 by and between DynaResource, Inc. and Golden Post Rail, LLC. |
10.9 |
Warrant dated September 1, 2026 by and between DynaResource, Inc. and Ocean Partners UK Limited. |
10.10 |
Warrant dated September 1, 2026 by and between DynaResource, Inc. and Gareth Nichol. |
10.11 |
Warrant dated September 1, 2026 by and between DynaResource, Inc. and Jay Redlingshafer. |
10.12 |
Warrant dated September 1, 2026 by and between DynaResource, Inc. and Smith First Family L.P. |
10.13 |
Warrant dated September 1, 2026 by and between DynaResource, Inc. and Doug Metcalf. |
10.14 |
Warrant dated September 1, 2026 by and between DynaResource, Inc. and Dale Petrini. |
10.15 |
Voting Agreement dated September 1, 2026 by and between DynaResource, Inc. and Golden Post Rail, LLC. |
10.16 |
Voting Agreement dated September 1, 2026 by and between DynaResource, Inc. and Ocean Partners UK Limited. |
10.17 |
Voting Agreement dated September 1, 2026 by and between DynaResource, Inc. and Gareth Nichol. |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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DYNARESOURCE, INC. |
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Date: |
September 2, 2026 |
By: |
/s/ Rohan Hazelton |
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Rohan Hazelton, Chief Executive Officer |
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is made as of September 1, 2026, by and between DYNARESOURCE, INC., a Delaware corporation (the “Company”), and GOLDEN POST RAIL, LLC, a Texas limited liability company (“Purchaser”).
RECITALS
A.
The Company intends to issue and sell up to 6,666,666 units, each unit consisting of one share of its common stock, par value $0.01 per share (“Common Stock”), and one warrant to purchase one share of Common Stock at an exercise price of $0.51 per share in a private offering with certain existing stockholders of the Company on the terms set forth below (the “Offering”).
B.
In connection with the Offering, certain existing stockholders of the Company have agreed to, on a one-time basis and for a period of up to 120 days, (i) waive all share reservation obligations of the Company under any and all certificates, instruments, plans and/or agreements corresponding to the securities listed on Schedule A hereto (the “Derivative Securities”), and (ii) not exercise or convert any Derivative Securities until such time as the Company files an amendment to its Amended and Restated Certificate of Incorporation, as amended, to either increase its number of authorized shares of Common Stock or effect a reverse stock split of the Common Stock, in each case to satisfy all share reservation obligations of the Company (the “Amendment”).
C.
As part of the Offering, the Board of Directors of the Company (the “Board of Directors”) has authorized the issuance to Purchaser for the aggregate purchase price set forth below (the “Purchase Price”), units (the “Units”), with each Unit consisting of (i) one share of Common Stock (such shares of Common Stock included in the Units, the “Shares”), and (ii) a warrant to purchase one share of Common Stock at an exercise price of $0.51 per share (the “Warrant,” and such shares of Common Stock issuable upon exercise of the Warrant, the “Warrant Shares”), each such Unit being sold at a purchase price of $0.45 per Unit.
D.
Purchaser wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, the Units.
NOW, THEREFORE, in consideration of the foregoing premises and in reliance on the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which the parties hereby acknowledge, it is agreed as follows:
1.
DEFINITIONS.
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1.1.
“Authorized Shares Increase” means an increase of the authorized shares of Common Stock or reverse stock split to accommodate the exercise of the Warrant to purchase the Warrant Shares in accordance with the terms of the Warrant (taking into account all issued and outstanding shares of Common Stock and all shares of Common Stock required to be reserved under all (a) outstanding Derivative Securities, (b) outstanding equity awards, and (c) Company equity incentive plans).
1.2.
“Authorized Shares Condition” means the approval by the requisite stockholders of the Company at a duly called meeting or by written consent of the Amendment and the filing of such Amendment with the Delaware Secretary of State.
1.3.
“Business Day” means any day other than a Saturday, Sunday, or any day on which banking institutions in the State of Texas are authorized or required by law, regulation, or executive order to close.
1.4.
“Series C Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series C Senior Convertible Preferred Stock, as amended.
1.5.
“Series D Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series D Convertible Preferred Stock, as amended.
1.6.
“Series E Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series E Convertible Preferred Stock, as amended.
1.7.
“Preemptive Rights Waiver” means the waiver by the Series C preferred stockholder of its preemptive rights and other anti-dilution protections under the Series C Designation in connection with the Offering.
1.8.
“Share Reservation Waivers” means (a) the waiver by the Series C and Series E preferred stockholder of the Company’s share reservation requirements under the Series C Designation and the Series E Designation, respectively; (b) the waiver by at least 85% of the Series D preferred stockholders of the Company’s share reservation requirements under the Series D Designation with respect to their Series D preferred stock; (c) the waiver by at least 88% of the Company’s existing warrant holders of the Company’s share reservation requirements under their outstanding warrants; (d) the waiver by all of the Company’s existing option holders of the Company’s share reservation requirements under their respective options; and (e) the agreement of each of the waiving Series C, D, and E preferred stockholders, warrant holders, and option holders not to convert or exercise, as applicable, any of their respective outstanding convertible preferred stock, warrants, and/or options, in each case, until after the Authorized Shares Condition is satisfied, subject to any other conditions set forth in such waivers.
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2.
PURCHASE AND SALE OF UNITS.
2.1.
Purchase and Sale. In reliance upon the representations and warranties of the Company and Purchaser contained herein and subject to the terms and conditions set forth herein, at the Closing (as defined below), Purchaser shall purchase, and the Company shall sell and issue to Purchaser, 1,913,889 Units for an aggregate Purchase Price of $861,250.05 (based on a purchase price of $0.45 per Unit), which Purchase Price was delivered by Purchaser to the Company by wire transfer of good funds to the account specified by the Company in advance of signing this Agreement.
2.2.
Issuance of Warrant. The Warrant shall be in the form attached hereto as Exhibit A and shall be exercisable for a period commencing on the date the Authorized Shares Condition is satisfied and ending at 5:00 p.m., Central time, on the later of (a) 180 days following the issuance date of the Warrant, and (b) 30 days following the satisfaction of the Authorized Shares Condition (the “Exercise Period”) at an exercise price of $0.51 per Warrant Share, subject to adjustment as provided therein.
3.
CLOSING.
3.1.
Date and Time. The sale of Units will take place at a closing (the “Closing”) at the offices of the Company or at such other place (or remotely) as the Company and Purchaser shall agree in writing concurrent with the execution of this Agreement.
4.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
As a material inducement to Purchaser to enter into this Agreement and to purchase the Units, the Company represents and warrants that the following statements are true and correct in all material respects as of the date hereof and will be true and correct in all material respects at Closing, except as expressly qualified or modified herein.
4.1.
Organization and Good Standing. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has full corporate power and authority to enter into and perform its obligations under this Agreement, and to own its properties and to carry on its business in all jurisdictions as presently conducted and as proposed to be conducted. The Company and its subsidiaries have all governmental and other licenses and permits and authorizations to do business in all jurisdictions where their activities require such licenses, permits and authorizations, except where failure to obtain any such license, permit or authorization will not have a material adverse effect on the Company’s business.
4.2.
Capitalization. As of immediately prior to the Closing, the Company was authorized to issue 60,001,000 shares of capital stock, consisting of 40,000,000 shares of Common Stock and 20,001,000 shares of Preferred Stock (the “Preferred Stock”), of which 30,149,059 shares of Common Stock, 1,734,992 shares of Series C Preferred Stock, 760,000 shares of Series D Preferred Stock and 1,552,795 shares of Series E Preferred Stock were issued and outstanding. All outstanding shares of the Company’s capital stock have been duly authorized and validly issued, and are fully paid, non-assessable, and free of any pre-emptive rights, other than those certain preemptive rights set forth in the Series C Designation. Schedule B hereto sets forth a
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complete and accurate list of (a) the number, class and beneficial owners of the Preferred Stock as of the date hereof and (b) the reserve requirements of the Company with respect to shares of Common Stock required to be reserved under all (w) outstanding Derivative Securities, (x) outstanding equity awards, (y) Company equity incentive plans and (z) the Warrants offered in connection with the Offering.
4.3.
Authorization and Enforcement. This Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights generally and to general principles of equity. The Company has full corporate power and authority necessary to enter into and deliver this Agreement and to perform its obligations hereunder.
4.4.
Reservation and Valid Issuance of Securities. Upon payment of the Purchase Price and issuance of the Units, (i) the Shares will be duly authorized, validly issued, fully paid, non-assessable and free of pre-emptive rights, (ii) the Warrant will be duly authorized, validly executed and delivered, and will constitute legal, valid and binding obligations of the Company, enforceable in accordance with its terms, and (iii) the Warrant Shares, when issued and paid for upon exercise of the Warrant in accordance with its terms, will be duly authorized, validly issued, fully paid, non-assessable and free of pre-emptive rights.
4.5.
Reservation of Warrant Shares. During the Exercise Period, the Company shall have reserved from its duly authorized capital stock the number of shares of Common Stock issuable upon exercise of the Warrant.
4.6.
No Conflict, Breach, Violation or Default; Third Party Consents. The execution, delivery and performance of this Agreement and the Warrant by the Company and the issuance and sale of the Units, including the Shares and the Warrant, and the issuance of the Warrant Shares upon exercise of the Warrant, will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under (i) the Company’s Amended and Restated Certificate of Incorporation, as amended, or the Company’s Bylaws, both as in effect on the date hereof (collectively, the “Company Documents”), (ii) any shareholder agreement or voting agreement to which any officer, director or holder of more than 5% of the Company’s securities is a party, (iii) any statute, rule, regulation or order of any governmental agency, self-regulatory agency, securities regulatory or insurance regulatory agency or body or any court, domestic or foreign, having jurisdiction over the Company or any of its assets or properties, or (iv) any material agreement or instrument to which the Company is a party or by which the Company is bound or to which any of its assets or properties is subject; except in the case of each of clauses (iii) and (iv), such as could not, individually or in the aggregate, have or reasonably be expected to result in a material adverse effect on the Company or its ability to perform its obligations hereunder. No approval of or filing with any governmental authority or other third-party entity or person is required for the Company to enter into, execute or perform this Agreement, the Warrant or any related transaction document.
4.7.
SEC Reports and Financial Statements.
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(i)
SEC Reports. The Company has made available to Purchaser through the SEC’s EDGAR system accurate and complete copies (excluding copies of exhibits) of each report, quarterly report, annual report, current report, registration statement, and definitive proxy statement or information statement filed by the Company with the United States Securities and Exchange Commission (“SEC”) since December 31, 2023 (collectively, the “SEC Reports”). All statements, reports, schedules, forms and other documents required to have been filed by the Company with the SEC have been so filed. To the Company’s Knowledge, as of the time it was filed with the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing): (i) each of the SEC Reports complied in all material respects with the applicable requirements of the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as applicable; and (ii) none of the SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(ii)
Financial Statements. The financial statements contained in the SEC Reports: (i) complied as to form in all material respects with the published rules and regulations of the SEC applicable thereto at the time of filing and as of the date of the Closing; (ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered (except as may be indicated in the notes to such financial statements and, in the case of unaudited statements, as permitted by Form 10-Q of the SEC, and except that unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end audit adjustments which will not, individually or in the aggregate, be material in amount); and (iii) fairly present, in all material respects, the financial position of the Company as of the respective dates thereof and the results of operations of the Company for the periods covered thereby, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. All adjustments considered necessary for a fair presentation of the financial statements have been included.
(iii)
Securities Law Compliance. Assuming the accuracy of the representations and warranties of Purchaser and each other purchaser, set forth in Section 5 of this Agreement or such other purchasers’ applicable securities purchase agreement, the offer and sale of the Units (including the Shares and the Warrant) and the issuance of the Warrant Shares upon exercise of the Warrant will constitute an exempted transaction under the Securities Act, and registration of the Units, Shares, Warrant and Warrant Shares is not required. The Company shall make such filings as may be necessary to comply with the federal securities laws and the “blue sky” laws of any state in connection with the offer and sale of the Units and the issuance of the Warrant Shares, which filings will be made in a timely manner.
(iv)
For the purposes of this Agreement, “Company’s Knowledge” means the actual knowledge of the executive officers (as defined in Rule 405 under the Securities Act) of the Company.
4.8.
Compliance with Law; No Disqualification.
(i)
OFAC. Neither the Company nor any of its affiliates or any of their respective directors, officers, employees or agents is a Person that is, or is owned or controlled by
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Persons that are: (A) the subject of any sanctions administered by the U.S. Department of Treasury’s Office of Foreign Assets Control or the U.S. Department of State, the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions authority (collectively, “Sanctions”), or (B) located, organized or resident in a country or territory that is the subject of Sanctions. Neither the Company nor any of its affiliates has engaged in, or is now engaged in, directly or indirectly, any dealings or transactions with any Person, or in any country or territory, that, at the time of the dealing or transaction, is or was the subject of Sanctions.
(ii)
Foreign Corrupt Practices Act. Neither the Company nor any director, officer, or employee of the Company, or to the Company’s Knowledge, any other person associated with or acting on behalf of the Company, including, without limitation, any agent or affiliate of the Company has (a) used any corporate funds for any unlawful contribution, gift, entertainment, or other unlawful expense relating to political activity or to influence official action; (b) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (c) made any bribe, rebate, payoff, influence payment, kickback, or other unlawful payment; or (d) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder; and the Company has instituted and maintains policies and procedures designed to ensure compliance therewith.
(iii)
No Disqualification Events. With respect to the Units (including the Shares, Warrant and Warrant Shares), neither the Company, nor any of its predecessors, directors, executive officers, or any beneficial owner (as that term is defined in Rule 13d-3 under the Exchange Act) of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale of the Units (each, an “Company Covered Person” and, collectively, “Company Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. The Company has exercised reasonable care to determine (i) the identity of each person that is a Company Covered Person; and (ii) whether any Company Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e) under the Securities Act, and has furnished to Purchaser a copy of any disclosures provided thereunder.
4.9.
No Directed Selling Efforts or General Solicitation. Neither the Company nor any Person, as defined below, acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D promulgated under the Securities Act) in connection with the offer or sale of any of the Units (including the Shares and the Warrant). For purposes of this Agreement, “Person” means any individual, corporation, company, limited liability company, partnership, limited liability partnership, trust, estate, proprietorship, joint venture, association, organization or entity.
4.10.
Solvency. As of the date of this Agreement (assuming the closing of the Offering), the Company is solvent. For purposes of this Section 4.10, the Company shall be
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deemed to be solvent if (a) the fair value of its assets exceeds its total liabilities, and (b) the Company is able to pay its debts as they become due in the ordinary course of business.
5.
REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents, warrants and covenants to the Company as follows:
5.1.
Legal Power. Purchaser has the requisite power and is authorized to enter into this Agreement, to purchase the Units hereunder, and to carry out and perform its obligations under the terms of this Agreement.
5.2.
Due Execution. This Agreement has been duly authorized, executed and delivered by Purchaser, and, upon due execution and delivery by the Company, this Agreement will be a valid and binding agreement of Purchaser.
5.3.
Access to Information. Purchaser understands that an investment in the Units involves a high degree of risk and long term or permanent illiquidity, including, risk of loss of their entire investment. Purchaser has been given full and complete access to the Company for the purpose of obtaining such information as Purchaser or its qualified representative has reasonably requested in connection with the decision to purchase the Units. Purchaser represents that Purchaser has received and reviewed copies of the SEC Reports. Purchaser represents that Purchaser has been afforded the opportunity to ask questions of the officers of the Company regarding its business prospects and the Units, all as Purchaser or Purchaser’s investor’s representatives have deemed necessary to make an informed investment decision to purchase the Units.
5.4.
Restricted Securities.
(i)
Purchaser has been advised that none of the Units, including the Shares and the Warrant underlying the Units, or the Warrant Shares, have been registered under the Securities Act or any other applicable securities laws and that the Units are being offered and sold pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D thereunder, and that the Company’s reliance upon Section 4(a)(2) and/or Rule 506 of Regulation D is predicated in part on such Purchaser representations as contained herein. Purchaser acknowledges that the Shares, Warrant and Warrant Shares will be issued as “restricted securities” as defined by Rule 144 promulgated pursuant to the Securities Act. None of the Shares, Warrant or Warrant Shares may be resold in the absence of an effective registration thereof under the Securities Act and applicable state securities laws unless, in the opinion of counsel reasonably satisfactory to the Company, an applicable exemption from registration is available.
(ii)
Purchaser represents that Purchaser is acquiring the Units for Purchaser’s own account, and not as nominee or agent, for investment purposes only and not with a view to, or for sale in connection with, a distribution, as that term is used in Section 2(11) of the Securities Act, in a manner which would require registration under the Securities Act or any state securities laws.
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(iii)
Purchaser understands and acknowledges that the certificates or book-entry statements representing the Shares and the Warrant will bear substantially the following legend:
“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES OR (ii) THE SECURITIES ARE SOLD PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. NOTWITHSTANDING THE FOREGOING, NO NOTICE TO OR CONSENT OF THE COMPANY SHALL BE REQUIRED IN CONNECTION WITH ANY SUCH SALE OR TRANSFERS.”
(iv)
Purchaser acknowledges that an investment in the Units is not liquid and is transferable only under limited conditions. Purchaser acknowledges that the Shares, Warrant and Warrant Shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Purchaser is aware of the provisions of Rule 144 promulgated under the Securities Act, which permits limited resale of restricted securities subject to the satisfaction of certain conditions and that such Rule is not now available and, in the future, may not become available for resale of any of the Shares, Warrant or Warrant Shares.
5.5.
Accredited Investor; Sophistication and Ability to Bear Risk of Loss. Purchaser is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act as of the date hereof and at any time it exercises the Warrant. Purchaser has not been organized for the specific purpose of acquiring the Units. Purchaser acknowledges that it is able to protect its interests in connection with the acquisition of the Units and can bear the economic risk of investment in such securities without producing a material adverse change in Purchaser’s financial condition. Purchaser has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Units.
5.6.
No Advertising. Purchaser has not received any general solicitation or advertising regarding the offer of the Units.
5.7.
Public Statements. Purchaser agrees not to issue any public statement with respect to the offering of the Units, Purchaser’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law.
5.8.
Confidential. Purchaser acknowledges that the information made available to Purchaser other than the SEC Reports is confidential and non-public and agrees that all such information shall be kept in confidence by Purchaser and neither used by Purchaser for Purchaser’s own benefit (other than in connection with this subscription) nor disclosed to any third party for any reason; provided, however, that (a) Purchaser may disclose such information to its affiliates
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and advisors who may have a need for such information in connection with providing advice to Purchaser with respect to its investment in the Company so long as such affiliates and advisors have an obligation of confidentiality, (b) this obligation shall not apply to any such information that (i) is part of the public knowledge or literature and readily accessible at the date hereof, (ii) becomes part of the public knowledge or literature and readily accessible by publication (except as a result of a breach of this provision), (iii) is being disclosed pursuant to a subpoena or court order or is otherwise required to be provided by law, or (iv) is received from third parties without an obligation of confidentiality (except third parties who disclose such information in violation of any confidentiality agreements or obligations, including, without limitation, any subscription or other similar agreement entered into with the Company) and (c) Purchaser may disclose such information as is necessary to enforce the terms of this Agreement.
5.9.
Exempt Offering. Purchaser understands that the Units are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of Purchaser in order to determine the availability of such exemptions and the eligibility of Purchaser to acquire the Units.
6.
CONDITIONS.
6.1.
Conditions Precedent to the Obligation of the Company to Close and to Sell the Units. The obligation hereunder of the Company to close and issue and sell the Units to Purchaser at the Closing is subject to the satisfaction or waiver, at or before such Closing of the conditions set forth below. These conditions are for the Company’s sole benefit and may be waived by the Company at any time in their sole discretion.
(i)
Accuracy of Purchaser’s Representations and Warranties. The representations and warranties of Purchaser shall be true and correct in all material respects as of the date when made and as of the Closing as though made at that time, except for representations and warranties that are expressly made as of a particular date, which shall be true and correct in all material respects as of such date.
(ii)
Performance by Purchaser. Purchaser shall have performed, satisfied, and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by Purchaser at or prior to the Closing.
(iii)
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
(iv)
Delivery of Purchase Price. The Purchase Price for the Units shall be available in cleared funds and authorized by the Company and Purchaser, in their sole and absolute discretion, for distribution on the Closing in accordance with the terms hereof.
9
(v)
Receipt of Waivers. The Company shall have received the necessary Preemptive Rights Waiver and Share Reservation Waivers.
(vi)
Voting Agreements. The Company and each of Golden Post Rail, LLC, Ocean Partners UK Limited, and Gareth Nichol shall have entered into voting agreements (the “Voting Agreements”) pursuant to which such stockholders shall have agreed to vote all of their shares entitled to vote at the Stockholder Meeting in favor of the Amendment, in accordance with and subject to the terms and conditions of the Voting Agreements.
6.2.
Conditions Precedent to the Obligation of Purchaser to Close and to Purchase the Units. The obligation hereunder of Purchaser to purchase the Units and consummate the transactions contemplated by this Agreement is subject to the satisfaction or waiver, at or before the Closing, of each of the conditions set forth below. These conditions are for Purchaser’s sole benefit and may be waived by Purchaser at any time in its sole discretion.
(i)
Accuracy of the Company’s Representations and Warranties. Each of the representations and warranties of the Company in this Agreement shall be true and correct in all material respects as of the Closing, except for representations and warranties that speak as of a particular date, which shall be true and correct in all material respects as of such date.
(ii)
Performance by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing.
(iii)
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
(iv)
No Proceedings or Litigation. No action, suit or proceeding before any arbitrator or any governmental authority shall have been commenced, and no investigation by any governmental authority shall have been initiated, against the Company, or any of the officers, directors or affiliates of the Company seeking to restrain, prevent or change the transactions contemplated by this Agreement, or seeking damages in connection with such transactions.
(v)
Units. At the Closing, the Company shall have delivered to Purchaser evidence of delivery of the Shares along with all appropriate board resolutions or other necessary documentation. The Company shall also deliver this Agreement and the Warrant, duly executed by the Company.
(vi)
Receipt of Waivers. The Company shall have received the necessary Preemptive Rights Waiver and Share Reservation Waivers.
(vii)
Voting Agreements. The Company and each of Golden Post Rail, LLC, Ocean Partners UK Limited, and Gareth Nichol shall have entered into the Voting Agreements.
10
7.
COVENANTS AND AGREEMENTS
7.1.
Use of Proceeds. The Company will use the net proceeds from the sale of the Units for a repayment of a portion of the credit facility provided to the Company, and for general corporate and working capital purposes. The Company agrees that, without the prior written consent of Purchaser, the Company will not use any such proceeds (i) to redeem, repurchase or otherwise acquire, or to make any distributions in respect of, any of the Company’s securities, (ii) to repay or otherwise satisfy any indebtedness of the Company (other than the aforementioned credit facility), or (iii) for any personal, family, or household purpose.
7.2.
Satisfaction of Authorized Shares Condition. The Company covenants as follows with respect to the Authorized Shares Condition:
(i)
Preliminary Proxy Statement. The Company shall prepare and file with the SEC a preliminary proxy statement (or preliminary information statement, if applicable) relating to the Authorized Shares Condition (the “Proxy Statement”) no later than thirty (30) days following the date of this Agreement. The Proxy Statement shall comply in all material respects with all applicable requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder.
(ii)
Definitive Proxy Statement. (A) If the SEC does not provide any comments on the Proxy Statement within the ten (10) day period following the filing of the preliminary Proxy Statement, the Company shall file the definitive Proxy Statement with the SEC promptly following the expiration of such ten (10) day period. (B) If the SEC provides comments on the Proxy Statement, the Company shall (i) respond to all such comments as promptly as practicable and use its reasonable best efforts to resolve all such comments with the SEC, and (ii) file the definitive Proxy Statement with the SEC within two (2) Business Days following the date on which the SEC confirms that it has no further comments on the Proxy Statement or otherwise clears the Proxy Statement for mailing. The Company shall promptly notify Purchaser of the receipt of any comments from the SEC on the Proxy Statement and shall provide Purchaser with copies of all correspondence between the Company and the SEC relating to the Proxy Statement.
(iii)
Stockholder Meeting. The Company shall duly call, give notice of, convene and hold a meeting of its stockholders (the “Stockholder Meeting”) for the purpose of obtaining stockholder approval of the Amendment and satisfaction of the Authorized Shares Condition no later than sixty (60) days following the date of filing of the definitive Proxy Statement. The Company shall use its reasonable best efforts to solicit proxies in favor of the Amendment and shall include in the Proxy Statement the recommendation of the Board of Directors that stockholders vote in favor of the Amendment. If on the date of the Stockholder Meeting, or a date preceding the date on which the Stockholder Meeting is scheduled, the Company reasonably believes that (i) it will not receive proxies sufficient to obtain stockholder approval of the Amendment, whether or not a quorum would be present, or (ii) it will not have a quorum, then the Company may adjourn or postpone the Stockholder Meeting; provided, however, that any such adjournment or postponement shall not extend beyond ninety (90) days following the date of this Agreement without the prior written consent of Purchaser.
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(iv)
Filing of Amendment. Promptly following receipt of the requisite stockholder approval of the Amendment at the Stockholder Meeting, the Company shall file the Amendment with the Delaware Secretary of State and provide evidence of such filing to Purchaser.
(v)
Reasonable Best Efforts. The Company shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to satisfy the Authorized Shares Condition as promptly as practicable; provided that the Company shall not be in default under this Agreement or the Warrant to the extent it exercises reasonable diligence in seeking to satisfy the Authorized Shares Condition; and provided, further, that in no event will the Company be in default under this Agreement or the Warrant if any failure of the Authorized Shares Condition results from the acts or omissions of Purchaser or any other purchaser of the Units (i.e., failure of such purchaser to vote all of its shares entitled to vote on the Authorized Shares Increase in favor of the Authorized Shares Increase).
7.3.
Most Favored Nations. Other than other securities purchase agreements containing the same terms as this Agreement (other than the number of Units purchased), the Company has not entered into any side letter or similar agreement with any other subscriber, investor or potential investor in connection with such other subscriber’s, investor’s or potential investor’s direct or indirect investment in the Company or participation in the Offering. The Company represents, warrants, and covenants that it has not offered, and will not offer, to any other stockholder participating in the Offering any terms or conditions that are more favorable than those set forth in this Agreement. If, at any time on or after the date hereof, the Company offers or grants to any other stockholder participating in the Offering any rights, terms, or conditions that are more favorable than those provided to Purchaser under this Agreement (including, without limitation, with respect to the Purchase Price of the Units, warrant coverage, exercise price of the Warrant, anti-dilution protections, registration rights, information rights, board observation or participation rights, or any other economic or governance terms), then (a) the Company shall provide Purchaser with prompt written notice of such more favorable terms, and (b) such more favorable terms shall automatically and without further action by Purchaser be deemed to apply to Purchaser and this Agreement (and any related transaction documents) shall be deemed amended to incorporate such more favorable terms, effective as of the date such terms were first offered or granted to such other stockholder. If, at any time on or after the date hereof, the Company offers or grants to any other stockholder participating in the Offering any rights, terms, or conditions that are more favorable than those provided to Purchaser under this Agreement, then the Company shall promptly prepare an amendment to this Agreement, such that such more favorable terms shall be memorialized in the amendment and become binding upon the Company to the benefit of Purchaser.
7.4.
Standstill on Securities Issuances.
(i)
From the date of this Agreement until such time as the Amendment has been duly filed with the Delaware Secretary of State (the “Standstill Period”), the Company shall not, without the prior written consent of Purchaser, directly or indirectly, issue, sell, grant or otherwise dispose of, or agree or commit to issue, sell, grant or otherwise dispose of, any shares of Common Stock, Preferred Stock, or any other equity securities of the Company, or any securities
12
convertible into, exchangeable for, or exercisable for equity securities of the Company, or any options, warrants, or other rights to acquire any such equity securities.
(ii)
Notwithstanding the foregoing, the restrictions set forth in Section 7.4(i) shall not apply to: (A) the issuance of Units, Shares and Warrants pursuant to and in accordance with the terms of this Agreement and the Offering; and (B) other than those securities that are the subject of the Share Reservation Waivers, the issuance of shares of Common Stock upon the exercise or conversion of Derivative Securities outstanding as of the date hereof, in accordance with the terms of such Derivative Securities as in effect on the date hereof.
(iii)
The Company shall provide Purchaser with prompt written notice of the filing of the Amendment with the Delaware Secretary of State, together with evidence of such filing, and upon such filing, the Standstill Period shall automatically terminate without further action by either party.
8.
MISCELLANEOUS.
8.1.
Governing Law. The validity and interpretation of this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. Each of the parties hereto and their assigns hereby consents to the exclusive jurisdiction and venue of the Courts of the State of Delaware, and the United States District Court for the State of Delaware with respect to any matter relating to this Agreement and performance of the parties’ obligations hereunder, the documents and instruments executed and delivered concurrently herewith or pursuant hereto and performance of the parties’ obligations thereunder and each of the parties hereto hereby consents to the personal jurisdiction of such courts and shall subject itself to such personal jurisdiction. Any action, suit or proceeding relating to such matters shall be commenced, pursued, defended and resolved only in such courts and any appropriate appellate court having jurisdiction to hear an appeal from any judgment entered in such courts. The parties irrevocably waive the defense of an inconvenient forum to the maintenance of such suit or proceeding. Service of process in any action, suit or proceeding relating to such matters may be made and served within or outside the State of Delaware by registered or certified mail to the parties and their representatives at their respective addresses specified in Section 8.6, provided that a reasonable time, not less than thirty (30) days, is allowed for response. Service of process may also be made in such other manner as may be permissible under the applicable court rules. THE PARTIES HERETO WAIVE TRIAL BY JURY.
8.2.
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, executors, and administrators of the parties hereto.
8.3.
Entire Agreement. This Agreement and the exhibits and schedules attached hereto, and the other documents, including the Preemptive Rights Waiver and Share Reservation Waivers, delivered pursuant hereto and thereto, constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants, or agreements except as specifically set forth herein or therein. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto and their respective
13
successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided herein.
8.4.
Severability. In case any provision of this Agreement shall be invalid, illegal, or unenforceable, it shall to the extent practicable, be modified so as to make it valid, legal and enforceable and to retain as nearly as practicable the intent of the parties, and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
8.5.
Amendment and Waiver. Except as otherwise provided herein, any term of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively, and either for a specified period of time or indefinitely), with the written consent of the Company and Purchaser. Any amendment or waiver effected in accordance with this Section 8.5 shall be binding upon each future holder of any security purchased under this Agreement and the Company.
8.6.
Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be effective when delivered personally, or sent by facsimile and in each case with a confirming email (with receipt confirmed), provided that a copy is mailed by registered mail, return receipt requested, or when received by the addressee, if sent by Express Mail, Federal Express or other express delivery service (receipt requested) in each case to the appropriate address set forth below:
If to the Company: DynaResource, Inc.
The Urban Towers of Las Colinas
222 W. Las Colinas Blvd.
Suite 1910 North Tower
Las Colinas / Irving, TX 75039
Email: rhazelton@dynaresource.com
Attention: Rohan Hazelton
If to Purchaser: Golden Post Rail, LLC
2633 Magnolia Circle
Westlake, TX 76262
Email: mrose@xtiecapital.com
Attention: Matthew K. Rose
With a copy to: Haynes and Boone, LLP
2801 N. Harwood Street, Suite 2300
Dallas, TX 75201
Email: matt.fry@haynesboone.com
Attention: Matthew L. Fry
8.7.
Faxes, Electronic Mail and Counterparts. This Agreement may be executed in one or more counterparts. Delivery of an executed counterpart of the Agreement or any exhibit attached hereto by facsimile transmission or electronic mail (any such delivery, an “Electronic Delivery”), shall be treated in all manner and respects as an original agreement or instrument and
14
shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto, each other party hereto shall re-execute original forms hereof and deliver them in person to all other parties. No party hereto shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense relates to lack of authenticity.
8.8.
Expenses. Except as specifically provided herein, each party shall bear its own costs and expenses, including legal and accounting fees, in connection with this Agreement and the transactions contemplated hereunder.
8.9.
Titles and Subtitles. The titles of the paragraphs and subparagraphs of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
8.10.
Further Assurances. At any time and from time to time after the Closing, upon reasonable request of the other, each party shall do, execute, acknowledge and deliver such further acts, assignments, transfers, conveyances and assurances as may be reasonably required for the more complete consummation of the transactions contemplated herein.
[Signatures on following page]
15
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.
DYNARESOURCE, INC.
By: /s/ Rohan Hazelton
Name: Rohan Hazelton
Title: Chief Executive Officer
GOLDEN POST RAIL, LLC
By: /s/ Matthew K. Rose
Name: Matthew K. Rose
Title: Manager
16
EXHIBIT A
Form of Warrant
[see attached]
[Form of Warrant]
SCHEDULE A
Derivative Securities
Name of Holder |
Title of Derivative Securities |
No. of Derivative Securities |
Golden Post Rail, LLC |
Series C Preferred Stock |
1,734,992 |
Golden Post Rail, LLC |
Series E Preferred Stock |
1,552,795 |
Golden Post Rail, LLC |
Series D Warrants |
783,976 |
Gareth Nichol |
Series D Preferred Stock |
500,000 |
Ronald Vail |
Series D Preferred Stock |
100,000 |
Dale Petrini |
Series D Preferred Stock |
50,000 |
Rohan Hazelton |
Options |
750,000 |
Quinton Hennigh |
Options |
400,000 |
[Schedule A]
SCHEDULE B
Capitalization
Preferred Stockholders
Name of Holder |
Class of Preferred Stock |
No. of Shares |
Golden Post Rail, LLC |
Series C |
1,734,992 |
Gareth Nichol |
Series D |
500,000 |
Ronald Vail |
Series D |
100,000 |
Dale Petrini |
Series D |
50,000 |
Thomas R. Tillander |
Series D |
35,000 |
Ralph C. Whalen |
Series D |
25,000 |
Paul Menegay |
Series D |
12,500 |
Jane Menegay |
Series D |
12,500 |
Duane Menegay |
Series D |
12,500 |
Paul Mark Woods |
Series D |
12,500 |
Golden Post Rail, LLC |
Series E |
1,552,795 |
Reserve Requirements
Category |
Reserve Requirements |
Derivative Securities (Series C, D, and E Preferred Stock and Series D Warrants) |
10,450,184 |
Outstanding Equity Awards |
3,592,142 |
Equity Incentive Plans (exclusive of Outstanding Equity Awards) |
1,020,358 |
Warrants (Current Offering) |
6,666,666 |
[Schedule B]
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is made as of September 1, 2026, by and between DYNARESOURCE, INC., a Delaware corporation (the “Company”), and OCEAN PARTNERS UK LIMITED, a United Kingdom corporation (“Purchaser”).
RECITALS
A.
The Company intends to issue and sell up to 6,666,666 units, each unit consisting of one share of its common stock, par value $0.01 per share (“Common Stock”), and one warrant to purchase one share of Common Stock at an exercise price of $0.51 per share in a private offering with certain existing stockholders of the Company on the terms set forth below (the “Offering”).
B.
In connection with the Offering, certain existing stockholders of the Company have agreed to, on a one-time basis and for a period of up to 120 days, (i) waive all share reservation obligations of the Company under any and all certificates, instruments, plans and/or agreements corresponding to the securities listed on Schedule Ahereto (the “Derivative Securities”), and (ii) not exercise or convert any Derivative Securities until such time as the Company files an amendment to its Amended and Restated Certificate of Incorporation, as amended, to either increase its number of authorized shares of Common Stock or effect a reverse stock split of the Common Stock, in each case to satisfy all share reservation obligations of the Company (the “Amendment”).
C.
As part of the Offering, the Board of Directors of the Company (the “Board of Directors”) has authorized the issuance to Purchaser for the aggregate purchase price set forth below (the “Purchase Price”), units (the “Units”), with each Unit consisting of (i) one share of Common Stock (such shares of Common Stock included in the Units, the “Shares”), and (ii) a warrant to purchase one share of Common Stock at an exercise price of $0.51 per share (the “Warrant,” and such shares of Common Stock issuable upon exercise of the Warrant, the “Warrant Shares”), each such Unit being sold at a purchase price of $0.45 per Unit.
D.
Purchaser wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, the Units.
NOW, THEREFORE, in consideration of the foregoing premises and in reliance on the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which the parties hereby acknowledge, it is agreed as follows:
1.
DEFINITIONS.
1.1.
“Authorized Shares Increase” means an increase of the authorized shares of Common Stock or reverse stock split to accommodate the exercise of the Warrant to purchase
1
the Warrant Shares in accordance with the terms of the Warrant (taking into account all issued and outstanding shares of Common Stock and all shares of Common Stock required to be reserved under all (a) outstanding Derivative Securities, (b) outstanding equity awards, and (c) Company equity incentive plans).
1.2.
“Authorized Shares Condition” means the approval by the requisite stockholders of the Company at a duly called meeting or by written consent of the Amendment and the filing of such Amendment with the Delaware Secretary of State.
1.3.
“Business Day” means any day other than a Saturday, Sunday, or any day on which banking institutions in the State of Texas are authorized or required by law, regulation, or executive order to close.
1.4.
“Series C Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series C Senior Convertible Preferred Stock, as amended.
1.5.
“Series D Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series D Convertible Preferred Stock, as amended.
1.6.
“Series E Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series E Convertible Preferred Stock, as amended.
1.7.
“Preemptive Rights Waiver” means the waiver by the Series C preferred stockholder of its preemptive rights and other anti-dilution protections under the Series C Designation in connection with the Offering.
1.8.
“Share Reservation Waivers” means (a) the waiver by the Series C and Series E preferred stockholder of the Company’s share reservation requirements under the Series C Designation and the Series E Designation, respectively; (b) the waiver by at least 85% of the Series D preferred stockholders of the Company’s share reservation requirements under the Series D Designation with respect to their Series D preferred stock; (c) the waiver by at least 88% of the Company’s existing warrant holders of the Company’s share reservation requirements under their outstanding warrants; (d) the waiver by all of the Company’s existing option holders of the Company’s share reservation requirements under their respective options; and (e) the agreement of each of the waiving Series C, D, and E preferred stockholders, warrant holders, and option holders not to convert or exercise, as applicable, any of their respective outstanding convertible preferred stock, warrants, and/or options, in each case, until after the Authorized Shares Condition is satisfied, subject to any other conditions set forth in such waivers.
2.
PURCHASE AND SALE OF UNITS.
2
2.1.
Purchase and Sale. In reliance upon the representations and warranties of the Company and Purchaser contained herein and subject to the terms and conditions set forth herein, at the Closing (as defined below), Purchaser shall purchase, and the Company shall sell and issue to Purchaser, 1,891,667 Units for an aggregate Purchase Price of $851,250.15 (based on a purchase price of $0.45 per Unit), which Purchase Price was delivered by Purchaser to the Company by wire transfer of good funds to the account specified by the Company in advance of signing this Agreement.
2.2.
Issuance of Warrant. The Warrant shall be in the form attached hereto as Exhibit A and shall be exercisable for a period commencing on the date the Authorized Shares Condition is satisfied and ending at 5:00 p.m., Central time, on the later of (a) 180 days following the issuance date of the Warrant, and (b) 30 days following the satisfaction of the Authorized Shares Condition (the “Exercise Period”) at an exercise price of $0.51 per Warrant Share, subject to adjustment as provided therein.
3.
CLOSING.
3.1.
Date and Time. The sale of Units will take place at a closing (the “Closing”) at the offices of the Company or at such other place (or remotely) as the Company and Purchaser shall agree in writing concurrent with the execution of this Agreement.
4.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
As a material inducement to Purchaser to enter into this Agreement and to purchase the Units, the Company represents and warrants that the following statements are true and correct in all material respects as of the date hereof and will be true and correct in all material respects at Closing, except as expressly qualified or modified herein.
4.1.
Organization and Good Standing. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has full corporate power and authority to enter into and perform its obligations under this Agreement, and to own its properties and to carry on its business in all jurisdictions as presently conducted and as proposed to be conducted. The Company and its subsidiaries have all governmental and other licenses and permits and authorizations to do business in all jurisdictions where their activities require such licenses, permits and authorizations, except where failure to obtain any such license, permit or authorization will not have a material adverse effect on the Company’s business.
4.2.
Capitalization. As of immediately prior to the Closing, the Company was authorized to issue 60,001,000 shares of capital stock, consisting of 40,000,000 shares of Common Stock and 20,001,000 shares of Preferred Stock (the “Preferred Stock”), of which 30,149,059 shares of Common Stock, 1,734,992 shares of Series C Preferred Stock, 760,000 shares of Series D Preferred Stock and 1,552,795 shares of Series E Preferred Stock were issued and outstanding. All outstanding shares of the Company’s capital stock have been duly authorized and validly issued, and are fully paid, non-assessable, and free of any pre-emptive rights, other than those certain preemptive rights set forth in the Series C Designation. Schedule B hereto sets forth a complete and accurate list of (a) the number, class and beneficial owners of the Preferred Stock as of the date hereof and (b) the reserve requirements of the Company with respect to shares of
3
Common Stock required to be reserved under all (w) outstanding Derivative Securities, (x) outstanding equity awards, (y) Company equity incentive plans and (z) the Warrants offered in connection with the Offering.
4.3.
Authorization and Enforcement. This Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights generally and to general principles of equity. The Company has full corporate power and authority necessary to enter into and deliver this Agreement and to perform its obligations hereunder.
4.4.
Reservation and Valid Issuance of Securities. Upon payment of the Purchase Price and issuance of the Units, (i) the Shares will be duly authorized, validly issued, fully paid, non-assessable and free of pre-emptive rights, (ii) the Warrant will be duly authorized, validly executed and delivered, and will constitute legal, valid and binding obligations of the Company, enforceable in accordance with its terms, and (iii) the Warrant Shares, when issued and paid for upon exercise of the Warrant in accordance with its terms, will be duly authorized, validly issued, fully paid, non-assessable and free of pre-emptive rights.
4.5.
Reservation of Warrant Shares. During the Exercise Period, the Company shall have reserved from its duly authorized capital stock the number of shares of Common Stock issuable upon exercise of the Warrant.
4.6.
No Conflict, Breach, Violation or Default; Third Party Consents. The execution, delivery and performance of this Agreement and the Warrant by the Company and the issuance and sale of the Units, including the Shares and the Warrant, and the issuance of the Warrant Shares upon exercise of the Warrant, will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under (i) the Company’s Amended and Restated Certificate of Incorporation, as amended, or the Company’s Bylaws, both as in effect on the date hereof (collectively, the “Company Documents”), (ii) any shareholder agreement or voting agreement to which any officer, director or holder of more than 5% of the Company’s securities is a party, (iii) any statute, rule, regulation or order of any governmental agency, self-regulatory agency, securities regulatory or insurance regulatory agency or body or any court, domestic or foreign, having jurisdiction over the Company or any of its assets or properties, or (iv) any material agreement or instrument to which the Company is a party or by which the Company is bound or to which any of its assets or properties is subject; except in the case of each of clauses (iii) and (iv), such as could not, individually or in the aggregate, have or reasonably be expected to result in a material adverse effect on the Company or its ability to perform its obligations hereunder. No approval of or filing with any governmental authority or other third-party entity or person is required for the Company to enter into, execute or perform this Agreement, the Warrant or any related transaction document.
4.7.
SEC Reports and Financial Statements.
4.7.1.
SEC Reports. The Company has made available to Purchaser through the SEC’s EDGAR system accurate and complete copies (excluding copies of exhibits) of
4
each report, quarterly report, annual report, current report, registration statement, and definitive proxy statement or information statement filed by the Company with the United States Securities and Exchange Commission (“SEC”) since December 31, 2023 (collectively, the “SEC Reports”). All statements, reports, schedules, forms and other documents required to have been filed by the Company with the SEC have been so filed. To the Company’s Knowledge, as of the time it was filed with the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing): (i) each of the SEC Reports complied in all material respects with the applicable requirements of the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as applicable; and (ii) none of the SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
4.7.2.
Financial Statements. The financial statements contained in the SEC Reports: (i) complied as to form in all material respects with the published rules and regulations of the SEC applicable thereto at the time of filing and as of the date of the Closing; (ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered (except as may be indicated in the notes to such financial statements and, in the case of unaudited statements, as permitted by Form 10-Q of the SEC, and except that unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end audit adjustments which will not, individually or in the aggregate, be material in amount); and (iii) fairly present, in all material respects, the financial position of the Company as of the respective dates thereof and the results of operations of the Company for the periods covered thereby, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. All adjustments considered necessary for a fair presentation of the financial statements have been included.
4.7.3.
Securities Law Compliance. Assuming the accuracy of the representations and warranties of Purchaser and each other purchaser, set forth in Section 5 of this Agreement or such other purchasers’ applicable securities purchase agreement, the offer and sale of the Units (including the Shares and the Warrant) and the issuance of the Warrant Shares upon exercise of the Warrant will constitute an exempted transaction under the Securities Act, and registration of the Units, Shares, Warrant and Warrant Shares is not required. The Company shall make such filings as may be necessary to comply with the federal securities laws and the “blue sky” laws of any state in connection with the offer and sale of the Units and the issuance of the Warrant Shares, which filings will be made in a timely manner.
4.7.4.
For the purposes of this Agreement, “Company’s Knowledge” means the actual knowledge of the executive officers (as defined in Rule 405 under the Securities Act) of the Company.
4.8.
Compliance with Law; No Disqualification.
4.8.1.
OFAC. Neither the Company nor any of its affiliates or any of their respective directors, officers, employees or agents is a Person that is, or is owned or controlled by Persons that are: (A) the subject of any sanctions administered by the U.S. Department of Treasury’s Office of Foreign Assets Control or the U.S. Department of State, the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions
5
authority (collectively, “Sanctions”), or (B) located, organized or resident in a country or territory that is the subject of Sanctions. Neither the Company nor any of its affiliates has engaged in, or is now engaged in, directly or indirectly, any dealings or transactions with any Person, or in any country or territory, that, at the time of the dealing or transaction, is or was the subject of Sanctions.
4.8.2.
Foreign Corrupt Practices Act. Neither the Company nor any director, officer, or employee of the Company, or to the Company’s Knowledge, any other person associated with or acting on behalf of the Company, including, without limitation, any agent or affiliate of the Company has (a) used any corporate funds for any unlawful contribution, gift, entertainment, or other unlawful expense relating to political activity or to influence official action; (b) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (c) made any bribe, rebate, payoff, influence payment, kickback, or other unlawful payment; or (d) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder; and the Company has instituted and maintains policies and procedures designed to ensure compliance therewith.
4.8.3.
No Disqualification Events. With respect to the Units (including the Shares, Warrant and Warrant Shares), neither the Company, nor any of its predecessors, directors, executive officers, or any beneficial owner (as that term is defined in Rule 13d-3 under the Exchange Act) of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale of the Units (each, an “Company Covered Person” and, collectively, “Company Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. The Company has exercised reasonable care to determine (i) the identity of each person that is a Company Covered Person; and (ii) whether any Company Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e) under the Securities Act, and has furnished to Purchaser a copy of any disclosures provided thereunder.
4.9.
No Directed Selling Efforts or General Solicitation. Neither the Company nor any Person, as defined below, acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D promulgated under the Securities Act) in connection with the offer or sale of any of the Units (including the Shares and the Warrant). For purposes of this Agreement, “Person” means any individual, corporation, company, limited liability company, partnership, limited liability partnership, trust, estate, proprietorship, joint venture, association, organization or entity.
4.10.
Solvency. As of the date of this Agreement (assuming the closing of the Offering), the Company is solvent. For purposes of this Section 4.10, the Company shall be deemed to be solvent if (a) the fair value of its assets exceeds its total liabilities, and (b) the Company is able to pay its debts as they become due in the ordinary course of business.
5.
REPRESENTATIONS AND WARRANTIES OF PURCHASER.
6
Purchaser hereby represents, warrants and covenants to the Company as follows:
5.1.
Legal Power. Purchaser has the requisite power and is authorized to enter into this Agreement, to purchase the Units hereunder, and to carry out and perform its obligations under the terms of this Agreement.
5.2.
Due Execution. This Agreement has been duly authorized, executed and delivered by Purchaser, and, upon due execution and delivery by the Company, this Agreement will be a valid and binding agreement of Purchaser.
5.3.
Access to Information. Purchaser understands that an investment in the Units involves a high degree of risk and long term or permanent illiquidity, including, risk of loss of their entire investment. Purchaser has been given full and complete access to the Company for the purpose of obtaining such information as Purchaser or its qualified representative has reasonably requested in connection with the decision to purchase the Units. Purchaser represents that Purchaser has received and reviewed copies of the SEC Reports. Purchaser represents that Purchaser has been afforded the opportunity to ask questions of the officers of the Company regarding its business prospects and the Units, all as Purchaser or Purchaser’s investor’s representatives have deemed necessary to make an informed investment decision to purchase the Units.
5.4.
Restricted Securities.
5.4.1.
Purchaser has been advised that none of the Units, including the Shares and the Warrant underlying the Units, or the Warrant Shares, have been registered under the Securities Act or any other applicable securities laws and that the Units are being offered and sold pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D thereunder, and that the Company’s reliance upon Section 4(a)(2) and/or Rule 506 of Regulation D is predicated in part on such Purchaser representations as contained herein. Purchaser acknowledges that the Shares, Warrant and Warrant Shares will be issued as “restricted securities” as defined by Rule 144 promulgated pursuant to the Securities Act. None of the Shares, Warrant or Warrant Shares may be resold in the absence of an effective registration thereof under the Securities Act and applicable state securities laws unless, in the opinion of counsel reasonably satisfactory to the Company, an applicable exemption from registration is available.
5.4.2.
Purchaser represents that Purchaser is acquiring the Units for Purchaser’s own account, and not as nominee or agent, for investment purposes only and not with a view to, or for sale in connection with, a distribution, as that term is used in Section 2(11) of the Securities Act, in a manner which would require registration under the Securities Act or any state securities laws.
5.4.3.
Purchaser understands and acknowledges that the certificates or book-entry statements representing the Shares and the Warrant will bear substantially the following legend:
“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE SOLD,
7
DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES OR (ii) THE SECURITIES ARE SOLD PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. NOTWITHSTANDING THE FOREGOING, NO NOTICE TO OR CONSENT OF THE COMPANY SHALL BE REQUIRED IN CONNECTION WITH ANY SUCH SALE OR TRANSFERS.”
5.4.4.
Purchaser acknowledges that an investment in the Units is not liquid and is transferable only under limited conditions. Purchaser acknowledges that the Shares, Warrant and Warrant Shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Purchaser is aware of the provisions of Rule 144 promulgated under the Securities Act, which permits limited resale of restricted securities subject to the satisfaction of certain conditions and that such Rule is not now available and, in the future, may not become available for resale of any of the Shares, Warrant or Warrant Shares.
5.5.
Accredited Investor; Sophistication and Ability to Bear Risk of Loss. Purchaser is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act as of the date hereof and at any time it exercises the Warrant. Purchaser has not been organized for the specific purpose of acquiring the Units. Purchaser acknowledges that it is able to protect its interests in connection with the acquisition of the Units and can bear the economic risk of investment in such securities without producing a material adverse change in Purchaser’s financial condition. Purchaser has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Units.
5.6.
No Advertising. Purchaser has not received any general solicitation or advertising regarding the offer of the Units.
5.7.
Public Statements. Purchaser agrees not to issue any public statement with respect to the offering of the Units, Purchaser’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law.
5.8.
Confidential. Purchaser acknowledges that the information made available to Purchaser other than the SEC Reports is confidential and non-public and agrees that all such information shall be kept in confidence by Purchaser and neither used by Purchaser for Purchaser’s own benefit (other than in connection with this subscription) nor disclosed to any third party for any reason; provided, however, that (a) Purchaser may disclose such information to its affiliates and advisors who may have a need for such information in connection with providing advice to Purchaser with respect to its investment in the Company so long as such affiliates and advisors have an obligation of confidentiality, (b) this obligation shall not apply to any such information that (i) is part of the public knowledge or literature and readily accessible at the date hereof, (ii) becomes part of the public knowledge or literature and readily accessible by publication (except as a result of a breach of this provision), (iii) is being disclosed pursuant to a subpoena or court order or is otherwise required to be provided by law, or (iv) is received from third parties without
8
an obligation of confidentiality (except third parties who disclose such information in violation of any confidentiality agreements or obligations, including, without limitation, any subscription or other similar agreement entered into with the Company) and (c) Purchaser may disclose such information as is necessary to enforce the terms of this Agreement.
5.9.
Exempt Offering. Purchaser understands that the Units are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of Purchaser in order to determine the availability of such exemptions and the eligibility of Purchaser to acquire the Units.
6.
CONDITIONS.
6.1.
Conditions Precedent to the Obligation of the Company to Close and to Sell the Units. The obligation hereunder of the Company to close and issue and sell the Units to Purchaser at the Closing is subject to the satisfaction or waiver, at or before such Closing of the conditions set forth below. These conditions are for the Company’s sole benefit and may be waived by the Company at any time in their sole discretion.
6.1.1.
Accuracy of Purchaser’s Representations and Warranties. The representations and warranties of Purchaser shall be true and correct in all material respects as of the date when made and as of the Closing as though made at that time, except for representations and warranties that are expressly made as of a particular date, which shall be true and correct in all material respects as of such date.
6.1.2.
Performance by Purchaser. Purchaser shall have performed, satisfied, and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by Purchaser at or prior to the Closing.
6.1.3.
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
6.1.4.
Delivery of Purchase Price. The Purchase Price for the Units shall be available in cleared funds and authorized by the Company and Purchaser, in their sole and absolute discretion, for distribution on the Closing in accordance with the terms hereof.
6.1.5.
Receipt of Waivers. The Company shall have received the necessary Preemptive Rights Waiver and Share Reservation Waivers.
6.1.6.
Voting Agreements. The Company and each of Golden Post Rail, LLC, Ocean Partners UK Limited, and Gareth Nichol shall have entered into voting agreements (the “Voting Agreements”) pursuant to which such stockholders shall have agreed to vote all of their shares entitled to vote at the Stockholder Meeting in favor of the Amendment, in accordance with and subject to the terms and conditions of the Voting Agreements.
9
6.2.
Conditions Precedent to the Obligation of Purchaser to Close and to Purchase the Units. The obligation hereunder of Purchaser to purchase the Units and consummate the transactions contemplated by this Agreement is subject to the satisfaction or waiver, at or before the Closing, of each of the conditions set forth below. These conditions are for Purchaser’s sole benefit and may be waived by Purchaser at any time in its sole discretion.
6.2.1.
Accuracy of the Company’s Representations and Warranties. Each of the representations and warranties of the Company in this Agreement shall be true and correct in all material respects as of the Closing, except for representations and warranties that speak as of a particular date, which shall be true and correct in all material respects as of such date.
6.2.2.
Performance by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing.
6.2.3.
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
6.2.4.
No Proceedings or Litigation. No action, suit or proceeding before any arbitrator or any governmental authority shall have been commenced, and no investigation by any governmental authority shall have been initiated, against the Company, or any of the officers, directors or affiliates of the Company seeking to restrain, prevent or change the transactions contemplated by this Agreement, or seeking damages in connection with such transactions.
6.2.5.
Units. At the Closing, the Company shall have delivered to Purchaser evidence of delivery of the Shares along with all appropriate board resolutions or other necessary documentation. The Company shall also deliver this Agreement and the Warrant, duly executed by the Company.
6.2.6.
Receipt of Waivers. The Company shall have received the necessary Preemptive Rights Waiver and Share Reservation Waivers.
6.2.7.
Voting Agreements. The Company and each of Golden Post Rail, LLC, Ocean Partners UK Limited, and Gareth Nichol shall have entered into the Voting Agreements.
7.
COVENANTS AND AGREEMENTS
7.1.
Use of Proceeds. The Company will use the net proceeds from the sale of the Units for a repayment of a portion of the credit facility provided to the Company, and for general corporate and working capital purposes. The Company agrees that, without the prior written consent of Purchaser, the Company will not use any such proceeds (i) to redeem, repurchase or otherwise acquire, or to make any distributions in respect of, any of the Company’s securities, (ii) to repay or otherwise satisfy any indebtedness of the Company (other than the aforementioned credit facility), or (iii) for any personal, family, or household purpose.
10
7.2.
Satisfaction of Authorized Shares Condition. The Company covenants as follows with respect to the Authorized Shares Condition:
7.2.1.
Preliminary Proxy Statement. The Company shall prepare and file with the SEC a preliminary proxy statement (or preliminary information statement, if applicable) relating to the Authorized Shares Condition (the “Proxy Statement”) no later than thirty (30) days following the date of this Agreement. The Proxy Statement shall comply in all material respects with all applicable requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder.
7.2.2.
Definitive Proxy Statement. (A) If the SEC does not provide any comments on the Proxy Statement within the ten (10) day period following the filing of the preliminary Proxy Statement, the Company shall file the definitive Proxy Statement with the SEC promptly following the expiration of such ten (10) day period. (B) If the SEC provides comments on the Proxy Statement, the Company shall (i) respond to all such comments as promptly as practicable and use its reasonable best efforts to resolve all such comments with the SEC, and (ii) file the definitive Proxy Statement with the SEC within two (2) Business Days following the date on which the SEC confirms that it has no further comments on the Proxy Statement or otherwise clears the Proxy Statement for mailing. The Company shall promptly notify Purchaser of the receipt of any comments from the SEC on the Proxy Statement and shall provide Purchaser with copies of all correspondence between the Company and the SEC relating to the Proxy Statement.
7.2.3.
Stockholder Meeting. The Company shall duly call, give notice of, convene and hold a meeting of its stockholders (the “Stockholder Meeting”) for the purpose of obtaining stockholder approval of the Amendment and satisfaction of the Authorized Shares Condition no later than sixty (60) days following the date of filing of the definitive Proxy Statement. The Company shall use its reasonable best efforts to solicit proxies in favor of the Amendment and shall include in the Proxy Statement the recommendation of the Board of Directors that stockholders vote in favor of the Amendment. If on the date of the Stockholder Meeting, or a date preceding the date on which the Stockholder Meeting is scheduled, the Company reasonably believes that (i) it will not receive proxies sufficient to obtain stockholder approval of the Amendment, whether or not a quorum would be present, or (ii) it will not have a quorum, then the Company may adjourn or postpone the Stockholder Meeting; provided, however, that any such adjournment or postponement shall not extend beyond ninety (90) days following the date of this Agreement without the prior written consent of Purchaser.
7.2.4.
Filing of Amendment. Promptly following receipt of the requisite stockholder approval of the Amendment at the Stockholder Meeting, the Company shall file the Amendment with the Delaware Secretary of State and provide evidence of such filing to Purchaser.
7.2.5.
Reasonable Best Efforts. The Company shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to satisfy the Authorized Shares Condition as promptly as practicable; provided that the Company shall not be in default under this Agreement or the Warrant to the extent it exercises reasonable diligence in seeking to satisfy the Authorized Shares Condition; and provided, further, that in no event will the Company be in default under this Agreement or the Warrant if any failure of the Authorized Shares Condition results from the acts or omissions of Purchaser or
11
any other purchaser of the Units (i.e., failure of such purchaser to vote all of its shares entitled to vote on the Authorized Shares Increase in favor of the Authorized Shares Increase).
7.3.
Most Favored Nations. Other than other securities purchase agreements containing the same terms as this Agreement (other than the number of Units purchased), the Company has not entered into any side letter or similar agreement with any other subscriber, investor or potential investor in connection with such other subscriber’s, investor’s or potential investor’s direct or indirect investment in the Company or participation in the Offering. The Company represents, warrants, and covenants that it has not offered, and will not offer, to any other stockholder participating in the Offering any terms or conditions that are more favorable than those set forth in this Agreement. If, at any time on or after the date hereof, the Company offers or grants to any other stockholder participating in the Offering any rights, terms, or conditions that are more favorable than those provided to Purchaser under this Agreement (including, without limitation, with respect to the Purchase Price of the Units, warrant coverage, exercise price of the Warrant, anti-dilution protections, registration rights, information rights, board observation or participation rights, or any other economic or governance terms), then (a) the Company shall provide Purchaser with prompt written notice of such more favorable terms, and (b) such more favorable terms shall automatically and without further action by Purchaser be deemed to apply to Purchaser and this Agreement (and any related transaction documents) shall be deemed amended to incorporate such more favorable terms, effective as of the date such terms were first offered or granted to such other stockholder. If, at any time on or after the date hereof, the Company offers or grants to any other stockholder participating in the Offering any rights, terms, or conditions that are more favorable than those provided to Purchaser under this Agreement, then the Company shall promptly prepare an amendment to this Agreement, such that such more favorable terms shall be memorialized in the amendment and become binding upon the Company to the benefit of Purchaser.
7.4.
Standstill on Securities Issuances.
7.4.1.
From the date of this Agreement until such time as the Amendment has been duly filed with the Delaware Secretary of State (the “Standstill Period”), the Company shall not, without the prior written consent of Purchaser, directly or indirectly, issue, sell, grant or otherwise dispose of, or agree or commit to issue, sell, grant or otherwise dispose of, any shares of Common Stock, Preferred Stock, or any other equity securities of the Company, or any securities convertible into, exchangeable for, or exercisable for equity securities of the Company, or any options, warrants, or other rights to acquire any such equity securities.
7.4.2.
Notwithstanding the foregoing, the restrictions set forth in Section 7.4(i) shall not apply to: (A) the issuance of Units, Shares and Warrants pursuant to and in accordance with the terms of this Agreement and the Offering; and (B) other than those securities that are the subject of the Share Reservation Waivers, the issuance of shares of Common Stock upon the exercise or conversion of Derivative Securities outstanding as of the date hereof, in accordance with the terms of such Derivative Securities as in effect on the date hereof.
7.4.3.
The Company shall provide Purchaser with prompt written notice of the filing of the Amendment with the Delaware Secretary of State, together with evidence of such
12
filing, and upon such filing, the Standstill Period shall automatically terminate without further action by either party.
8.
MISCELLANEOUS.
8.1.
Governing Law. The validity and interpretation of this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. Each of the parties hereto and their assigns hereby consents to the exclusive jurisdiction and venue of the Courts of the State of Delaware, and the United States District Court for the State of Delaware with respect to any matter relating to this Agreement and performance of the parties’ obligations hereunder, the documents and instruments executed and delivered concurrently herewith or pursuant hereto and performance of the parties’ obligations thereunder and each of the parties hereto hereby consents to the personal jurisdiction of such courts and shall subject itself to such personal jurisdiction. Any action, suit or proceeding relating to such matters shall be commenced, pursued, defended and resolved only in such courts and any appropriate appellate court having jurisdiction to hear an appeal from any judgment entered in such courts. The parties irrevocably waive the defense of an inconvenient forum to the maintenance of such suit or proceeding. Service of process in any action, suit or proceeding relating to such matters may be made and served within or outside the State of Delaware by registered or certified mail to the parties and their representatives at their respective addresses specified in Section 8.6, providedthat a reasonable time, not less than thirty (30) days, is allowed for response. Service of process may also be made in such other manner as may be permissible under the applicable court rules. THE PARTIES HERETO WAIVE TRIAL BY JURY.
8.2.
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, executors, and administrators of the parties hereto.
8.3.
Entire Agreement. This Agreement and the exhibits and schedules attached hereto, and the other documents, including the Preemptive Rights Waiver and Share Reservation Waivers, delivered pursuant hereto and thereto, constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants, or agreements except as specifically set forth herein or therein. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto and their respective successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided herein.
8.4.
Severability. In case any provision of this Agreement shall be invalid, illegal, or unenforceable, it shall to the extent practicable, be modified so as to make it valid, legal and enforceable and to retain as nearly as practicable the intent of the parties, and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
8.5.
Amendment and Waiver. Except as otherwise provided herein, any term of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively, and either for a
13
specified period of time or indefinitely), with the written consent of the Company and Purchaser. Any amendment or waiver effected in accordance with this Section 8.5 shall be binding upon each future holder of any security purchased under this Agreement and the Company.
8.6.
Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be effective when delivered personally, or sent by facsimile and in each case with a confirming email (with receipt confirmed), provided that a copy is mailed by registered mail, return receipt requested, or when received by the addressee, if sent by Express Mail, Federal Express or other express delivery service (receipt requested) in each case to the appropriate address set forth below:
If to the Company: DynaResource, Inc.
The Urban Towers of Las Colinas
222 W. Las Colinas Blvd.
Suite 1910 North Tower
Las Colinas / Irving, TX 75039
Email: rhazelton@dynaresource.com
Attention: Rohan Hazelton
If to Purchaser: Ocean Partners UK Limited
3rdFloor, The Pearce Building, West Street
Maidenhead, Berkshire, UK SL6 1RL
Email: brent.omland@oceanpartners.com chamath.kodagoda@oceanpartners.com
Attention: Brent Omland
8.7.
Faxes, Electronic Mail and Counterparts. This Agreement may be executed in one or more counterparts. Delivery of an executed counterpart of the Agreement or any exhibit attached hereto by facsimile transmission or electronic mail (any such delivery, an “Electronic Delivery”), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto, each other party hereto shall re-execute original forms hereof and deliver them in person to all other parties. No party hereto shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense relates to lack of authenticity.
8.8.
Expenses. Except as specifically provided herein, each party shall bear its own costs and expenses, including legal and accounting fees, in connection with this Agreement and the transactions contemplated hereunder.
8.9.
Titles and Subtitles. The titles of the paragraphs and subparagraphs of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
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8.10.
Further Assurances. At any time and from time to time after the Closing, upon reasonable request of the other, each party shall do, execute, acknowledge and deliver such further acts, assignments, transfers, conveyances and assurances as may be reasonably required for the more complete consummation of the transactions contemplated herein.
[Signatures on following page]
15
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.
DYNARESOURCE, INC.
By: /s/ Rohan Hazelton
Name: Rohan Hazelton
Title: Chief Executive Officer
OCEAN PARTNERS UK LIMITED
By: /s/ Neil Poulter
Name: Neil Poulter
Title: Director
16
EXHIBIT A
Form of Warrant
[see attached]
[Form of Warrant]
SCHEDULE A
Derivative Securities
Name of Holder |
Title of Derivative Securities |
No. of Derivative Securities |
Golden Post Rail, LLC |
Series C Preferred Stock |
1,734,992 |
Golden Post Rail, LLC |
Series E Preferred Stock |
1,552,795 |
Golden Post Rail, LLC |
Series D Warrants |
783,976 |
Gareth Nichol |
Series D Preferred Stock |
500,000 |
Ronald Vail |
Series D Preferred Stock |
100,000 |
Dale Petrini |
Series D Preferred Stock |
50,000 |
Rohan Hazelton |
Options |
750,000 |
Quinton Hennigh |
Options |
400,000 |
[Schedule A]
SCHEDULE B
Capitalization
Preferred Stockholders
Name of Holder |
Class of Preferred Stock |
No. of Shares |
Golden Post Rail, LLC |
Series C |
1,734,992 |
Gareth Nichol |
Series D |
500,000 |
Ronald Vail |
Series D |
100,000 |
Dale Petrini |
Series D |
50,000 |
Thomas R. Tillander |
Series D |
35,000 |
Ralph C. Whalen |
Series D |
25,000 |
Paul Menegay |
Series D |
12,500 |
Jane Menegay |
Series D |
12,500 |
Duane Menegay |
Series D |
12,500 |
Paul Mark Woods |
Series D |
12,500 |
Golden Post Rail, LLC |
Series E |
1,552,795 |
Reserve Requirements
Category |
Reserve Requirements |
Derivative Securities (Series C, D, and E Preferred Stock and Series D Warrants) |
10,450,184 |
Outstanding Equity Awards |
3,592,142 |
Equity Incentive Plans (exclusive of Outstanding Equity Awards) |
1,020,358 |
Warrants (Current Offering) |
6,666,666 |
[Schedule B]
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is made as of September 1, 2026, by and between DYNARESOURCE, INC., a Delaware corporation (the “Company”), and GARETH NICHOL, an individual (“Purchaser”).
RECITALS
A.
The Company intends to issue and sell up to 6,666,666 units, each unit consisting of one share of its common stock, par value $0.01 per share (“Common Stock”), and one warrant to purchase one share of Common Stock at an exercise price of $0.51 per share in a private offering with certain existing stockholders of the Company on the terms set forth below (the “Offering”).
B.
In connection with the Offering, certain existing stockholders of the Company have agreed to, on a one-time basis and for a period of up to 120 days, (i) waive all share reservation obligations of the Company under any and all certificates, instruments, plans and/or agreements corresponding to the securities listed on Schedule Ahereto (the “Derivative Securities”), and (ii) not exercise or convert any Derivative Securities until such time as the Company files an amendment to its Amended and Restated Certificate of Incorporation, as amended, to either increase its number of authorized shares of Common Stock or effect a reverse stock split of the Common Stock, in each case to satisfy all share reservation obligations of the Company (the “Amendment”).
C.
As part of the Offering, the Board of Directors of the Company (the “Board of Directors”) has authorized the issuance to Purchaser for the aggregate purchase price set forth below (the “Purchase Price”), units (the “Units”), with each Unit consisting of (i) one share of Common Stock (such shares of Common Stock included in the Units, the “Shares”), and (ii) a warrant to purchase one share of Common Stock at an exercise price of $0.51 per share (the “Warrant,” and such shares of Common Stock issuable upon exercise of the Warrant, the “Warrant Shares”), each such Unit being sold at a purchase price of $0.45 per Unit.
D.
Purchaser wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, the Units.
NOW, THEREFORE, in consideration of the foregoing premises and in reliance on the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which the parties hereby acknowledge, it is agreed as follows:
1.
DEFINITIONS.
1.1.
“Authorized Shares Increase” means an increase of the authorized shares of Common Stock or reverse stock split to accommodate the exercise of the Warrant to purchase
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the Warrant Shares in accordance with the terms of the Warrant (taking into account all issued and outstanding shares of Common Stock and all shares of Common Stock required to be reserved under all (a) outstanding Derivative Securities, (b) outstanding equity awards, and (c) Company equity incentive plans).
1.2.
“Authorized Shares Condition” means the approval by the requisite stockholders of the Company at a duly called meeting or by written consent of the Amendment and the filing of such Amendment with the Delaware Secretary of State.
1.3.
“Business Day” means any day other than a Saturday, Sunday, or any day on which banking institutions in the State of Texas are authorized or required by law, regulation, or executive order to close.
1.4.
“Series C Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series C Senior Convertible Preferred Stock, as amended.
1.5.
“Series D Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series D Convertible Preferred Stock, as amended.
1.6.
“Series E Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series E Convertible Preferred Stock, as amended.
1.7.
“Preemptive Rights Waiver” means the waiver by the Series C preferred stockholder of its preemptive rights and other anti-dilution protections under the Series C Designation in connection with the Offering.
1.8.
“Share Reservation Waivers” means (a) the waiver by the Series C and Series E preferred stockholder of the Company’s share reservation requirements under the Series C Designation and the Series E Designation, respectively; (b) the waiver by at least 85% of the Series D preferred stockholders of the Company’s share reservation requirements under the Series D Designation with respect to their Series D preferred stock; (c) the waiver by at least 88% of the Company’s existing warrant holders of the Company’s share reservation requirements under their outstanding warrants; (d) the waiver by all of the Company’s existing option holders of the Company’s share reservation requirements under their respective options; and (e) the agreement of each of the waiving Series C, D, and E preferred stockholders, warrant holders, and option holders not to convert or exercise, as applicable, any of their respective outstanding convertible preferred stock, warrants, and/or options, in each case, until after the Authorized Shares Condition is satisfied, subject to any other conditions set forth in such waivers.
2.
PURCHASE AND SALE OF UNITS.
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2.1.
Purchase and Sale. In reliance upon the representations and warranties of the Company and Purchaser contained herein and subject to the terms and conditions set forth herein, at the Closing (as defined below), Purchaser shall purchase, and the Company shall sell and issue to Purchaser, 2,000,000 Units for an aggregate Purchase Price of $900,000.00 (based on a purchase price of $0.45 per Unit), which Purchase Price was delivered by Purchaser to the Company by wire transfer of good funds to the account specified by the Company in advance of signing this Agreement.
2.2.
Issuance of Warrant. The Warrant shall be in the form attached hereto as Exhibit A and shall be exercisable for a period commencing on the date the Authorized Shares Condition is satisfied and ending at 5:00 p.m., Central time, on the later of (a) 180 days following the issuance date of the Warrant, and (b) 30 days following the satisfaction of the Authorized Shares Condition (the “Exercise Period”) at an exercise price of $0.51 per Warrant Share, subject to adjustment as provided therein.
3.
CLOSING.
3.1.
Date and Time. The sale of Units will take place at a closing (the “Closing”) at the offices of the Company or at such other place (or remotely) as the Company and Purchaser shall agree in writing concurrent with the execution of this Agreement.
4.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
As a material inducement to Purchaser to enter into this Agreement and to purchase the Units, the Company represents and warrants that the following statements are true and correct in all material respects as of the date hereof and will be true and correct in all material respects at Closing, except as expressly qualified or modified herein.
4.1.
Organization and Good Standing. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has full corporate power and authority to enter into and perform its obligations under this Agreement, and to own its properties and to carry on its business in all jurisdictions as presently conducted and as proposed to be conducted. The Company and its subsidiaries have all governmental and other licenses and permits and authorizations to do business in all jurisdictions where their activities require such licenses, permits and authorizations, except where failure to obtain any such license, permit or authorization will not have a material adverse effect on the Company’s business.
4.2.
Capitalization. As of immediately prior to the Closing, the Company was authorized to issue 60,001,000 shares of capital stock, consisting of 40,000,000 shares of Common Stock and 20,001,000 shares of Preferred Stock (the “Preferred Stock”), of which 30,149,059 shares of Common Stock, 1,734,992 shares of Series C Preferred Stock, 760,000 shares of Series D Preferred Stock and 1,552,795 shares of Series E Preferred Stock were issued and outstanding. All outstanding shares of the Company’s capital stock have been duly authorized and validly issued, and are fully paid, non-assessable, and free of any pre-emptive rights, other than those certain preemptive rights set forth in the Series C Designation. Schedule B hereto sets forth a complete and accurate list of (a) the number, class and beneficial owners of the Preferred Stock as of the date hereof and (b) the reserve requirements of the Company with respect to shares of
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Common Stock required to be reserved under all (w) outstanding Derivative Securities, (x) outstanding equity awards, (y) Company equity incentive plans and (z) the Warrants offered in connection with the Offering.
4.3.
Authorization and Enforcement. This Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights generally and to general principles of equity. The Company has full corporate power and authority necessary to enter into and deliver this Agreement and to perform its obligations hereunder.
4.4.
Reservation and Valid Issuance of Securities. Upon payment of the Purchase Price and issuance of the Units, (i) the Shares will be duly authorized, validly issued, fully paid, non-assessable and free of pre-emptive rights, (ii) the Warrant will be duly authorized, validly executed and delivered, and will constitute legal, valid and binding obligations of the Company, enforceable in accordance with its terms, and (iii) the Warrant Shares, when issued and paid for upon exercise of the Warrant in accordance with its terms, will be duly authorized, validly issued, fully paid, non-assessable and free of pre-emptive rights.
4.5.
Reservation of Warrant Shares. During the Exercise Period, the Company shall have reserved from its duly authorized capital stock the number of shares of Common Stock issuable upon exercise of the Warrant.
4.6.
No Conflict, Breach, Violation or Default; Third Party Consents. The execution, delivery and performance of this Agreement and the Warrant by the Company and the issuance and sale of the Units, including the Shares and the Warrant, and the issuance of the Warrant Shares upon exercise of the Warrant, will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under (i) the Company’s Amended and Restated Certificate of Incorporation, as amended, or the Company’s Bylaws, both as in effect on the date hereof (collectively, the “Company Documents”), (ii) any shareholder agreement or voting agreement to which any officer, director or holder of more than 5% of the Company’s securities is a party, (iii) any statute, rule, regulation or order of any governmental agency, self-regulatory agency, securities regulatory or insurance regulatory agency or body or any court, domestic or foreign, having jurisdiction over the Company or any of its assets or properties, or (iv) any material agreement or instrument to which the Company is a party or by which the Company is bound or to which any of its assets or properties is subject; except in the case of each of clauses (iii) and (iv), such as could not, individually or in the aggregate, have or reasonably be expected to result in a material adverse effect on the Company or its ability to perform its obligations hereunder. No approval of or filing with any governmental authority or other third-party entity or person is required for the Company to enter into, execute or perform this Agreement, the Warrant or any related transaction document.
4.7.
SEC Reports and Financial Statements.
4.7.1.
SEC Reports. The Company has made available to Purchaser through the SEC’s EDGAR system accurate and complete copies (excluding copies of exhibits) of
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each report, quarterly report, annual report, current report, registration statement, and definitive proxy statement or information statement filed by the Company with the United States Securities and Exchange Commission (“SEC”) since December 31, 2023 (collectively, the “SEC Reports”). All statements, reports, schedules, forms and other documents required to have been filed by the Company with the SEC have been so filed. To the Company’s Knowledge, as of the time it was filed with the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing): (i) each of the SEC Reports complied in all material respects with the applicable requirements of the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as applicable; and (ii) none of the SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
4.7.2.
Financial Statements. The financial statements contained in the SEC Reports: (i) complied as to form in all material respects with the published rules and regulations of the SEC applicable thereto at the time of filing and as of the date of the Closing; (ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered (except as may be indicated in the notes to such financial statements and, in the case of unaudited statements, as permitted by Form 10-Q of the SEC, and except that unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end audit adjustments which will not, individually or in the aggregate, be material in amount); and (iii) fairly present, in all material respects, the financial position of the Company as of the respective dates thereof and the results of operations of the Company for the periods covered thereby, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. All adjustments considered necessary for a fair presentation of the financial statements have been included.
4.7.3.
Securities Law Compliance. Assuming the accuracy of the representations and warranties of Purchaser and each other purchaser, set forth in Section 5 of this Agreement or such other purchasers’ applicable securities purchase agreement, the offer and sale of the Units (including the Shares and the Warrant) and the issuance of the Warrant Shares upon exercise of the Warrant will constitute an exempted transaction under the Securities Act, and registration of the Units, Shares, Warrant and Warrant Shares is not required. The Company shall make such filings as may be necessary to comply with the federal securities laws and the “blue sky” laws of any state in connection with the offer and sale of the Units and the issuance of the Warrant Shares, which filings will be made in a timely manner.
4.7.4.
For the purposes of this Agreement, “Company’s Knowledge” means the actual knowledge of the executive officers (as defined in Rule 405 under the Securities Act) of the Company.
4.8.
Compliance with Law; No Disqualification.
4.8.1.
OFAC. Neither the Company nor any of its affiliates or any of their respective directors, officers, employees or agents is a Person that is, or is owned or controlled by Persons that are: (A) the subject of any sanctions administered by the U.S. Department of Treasury’s Office of Foreign Assets Control or the U.S. Department of State, the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions
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authority (collectively, “Sanctions”), or (B) located, organized or resident in a country or territory that is the subject of Sanctions. Neither the Company nor any of its affiliates has engaged in, or is now engaged in, directly or indirectly, any dealings or transactions with any Person, or in any country or territory, that, at the time of the dealing or transaction, is or was the subject of Sanctions.
4.8.2.
Foreign Corrupt Practices Act. Neither the Company nor any director, officer, or employee of the Company, or to the Company’s Knowledge, any other person associated with or acting on behalf of the Company, including, without limitation, any agent or affiliate of the Company has (a) used any corporate funds for any unlawful contribution, gift, entertainment, or other unlawful expense relating to political activity or to influence official action; (b) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (c) made any bribe, rebate, payoff, influence payment, kickback, or other unlawful payment; or (d) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder; and the Company has instituted and maintains policies and procedures designed to ensure compliance therewith.
4.8.3.
No Disqualification Events. With respect to the Units (including the Shares, Warrant and Warrant Shares), neither the Company, nor any of its predecessors, directors, executive officers, or any beneficial owner (as that term is defined in Rule 13d-3 under the Exchange Act) of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale of the Units (each, an “Company Covered Person” and, collectively, “Company Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. The Company has exercised reasonable care to determine (i) the identity of each person that is a Company Covered Person; and (ii) whether any Company Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e) under the Securities Act, and has furnished to Purchaser a copy of any disclosures provided thereunder.
4.9.
No Directed Selling Efforts or General Solicitation. Neither the Company nor any Person, as defined below, acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D promulgated under the Securities Act) in connection with the offer or sale of any of the Units (including the Shares and the Warrant). For purposes of this Agreement, “Person” means any individual, corporation, company, limited liability company, partnership, limited liability partnership, trust, estate, proprietorship, joint venture, association, organization or entity.
4.10.
Solvency. As of the date of this Agreement (assuming the closing of the Offering), the Company is solvent. For purposes of this Section 4.10, the Company shall be deemed to be solvent if (a) the fair value of its assets exceeds its total liabilities, and (b) the Company is able to pay its debts as they become due in the ordinary course of business.
5.
REPRESENTATIONS AND WARRANTIES OF PURCHASER.
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Purchaser hereby represents, warrants and covenants to the Company as follows:
5.1.
Legal Power. Purchaser has the requisite power and is authorized to enter into this Agreement, to purchase the Units hereunder, and to carry out and perform his obligations under the terms of this Agreement.
5.2.
Due Execution. This Agreement has been duly authorized, executed and delivered by Purchaser, and, upon due execution and delivery by the Company, this Agreement will be a valid and binding agreement of Purchaser.
5.3.
Access to Information. Purchaser understands that an investment in the Units involves a high degree of risk and long term or permanent illiquidity, including, risk of loss of their entire investment. Purchaser has been given full and complete access to the Company for the purpose of obtaining such information as Purchaser or his qualified representative has reasonably requested in connection with the decision to purchase the Units. Purchaser represents that Purchaser has received and reviewed copies of the SEC Reports. Purchaser represents that Purchaser has been afforded the opportunity to ask questions of the officers of the Company regarding its business prospects and the Units, all as Purchaser or Purchaser’s investor’s representatives have deemed necessary to make an informed investment decision to purchase the Units.
5.4.
Restricted Securities.
5.4.1.
Purchaser has been advised that none of the Units, including the Shares and the Warrant underlying the Units, or the Warrant Shares, have been registered under the Securities Act or any other applicable securities laws and that the Units are being offered and sold pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D thereunder, and that the Company’s reliance upon Section 4(a)(2) and/or Rule 506 of Regulation D is predicated in part on such Purchaser representations as contained herein. Purchaser acknowledges that the Shares, Warrant and Warrant Shares will be issued as “restricted securities” as defined by Rule 144 promulgated pursuant to the Securities Act. None of the Shares, Warrant or Warrant Shares may be resold in the absence of an effective registration thereof under the Securities Act and applicable state securities laws unless, in the opinion of counsel reasonably satisfactory to the Company, an applicable exemption from registration is available.
5.4.2.
Purchaser represents that Purchaser is acquiring the Units for Purchaser’s own account, and not as nominee or agent, for investment purposes only and not with a view to, or for sale in connection with, a distribution, as that term is used in Section 2(11) of the Securities Act, in a manner which would require registration under the Securities Act or any state securities laws.
5.4.3.
Purchaser understands and acknowledges that the certificates or book-entry statements representing the Shares and the Warrant will bear substantially the following legend:
“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE SOLD,
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DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES OR (ii) THE SECURITIES ARE SOLD PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. NOTWITHSTANDING THE FOREGOING, NO NOTICE TO OR CONSENT OF THE COMPANY SHALL BE REQUIRED IN CONNECTION WITH ANY SUCH SALE OR TRANSFERS.”
5.4.4.
Purchaser acknowledges that an investment in the Units is not liquid and is transferable only under limited conditions. Purchaser acknowledges that the Shares, Warrant and Warrant Shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Purchaser is aware of the provisions of Rule 144 promulgated under the Securities Act, which permits limited resale of restricted securities subject to the satisfaction of certain conditions and that such Rule is not now available and, in the future, may not become available for resale of any of the Shares, Warrant or Warrant Shares.
5.5.
Accredited Investor; Sophistication and Ability to Bear Risk of Loss. Purchaser is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act as of the date hereof and at any time he exercises the Warrant. Purchaser acknowledges that he is able to protect his interests in connection with the acquisition of the Units and can bear the economic risk of investment in such securities without producing a material adverse change in Purchaser’s financial condition. Purchaser has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of an investment in the Units.
5.6.
No Advertising. Purchaser has not received any general solicitation or advertising regarding the offer of the Units.
5.7.
Public Statements. Purchaser agrees not to issue any public statement with respect to the offering of the Units, Purchaser’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law.
5.8.
Confidential. Purchaser acknowledges that the information made available to Purchaser other than the SEC Reports is confidential and non-public and agrees that all such information shall be kept in confidence by Purchaser and neither used by Purchaser for Purchaser’s own benefit (other than in connection with this subscription) nor disclosed to any third party for any reason; provided, however, that (a) Purchaser may disclose such information to his affiliates and advisors who may have a need for such information in connection with providing advice to Purchaser with respect to its investment in the Company so long as such affiliates and advisors have an obligation of confidentiality, (b) this obligation shall not apply to any such information that (i) is part of the public knowledge or literature and readily accessible at the date hereof, (ii) becomes part of the public knowledge or literature and readily accessible by publication (except as a result of a breach of this provision), (iii) is being disclosed pursuant to a subpoena or court order or is otherwise required to be provided by law, or (iv) is received from third parties without an obligation of confidentiality (except third parties who disclose such information in violation of
8
any confidentiality agreements or obligations, including, without limitation, any subscription or other similar agreement entered into with the Company) and (c) Purchaser may disclose such information as is necessary to enforce the terms of this Agreement.
5.9.
Exempt Offering. Purchaser understands that the Units are being offered and sold to him in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of Purchaser in order to determine the availability of such exemptions and the eligibility of Purchaser to acquire the Units.
6.
CONDITIONS.
6.1.
Conditions Precedent to the Obligation of the Company to Close and to Sell the Units. The obligation hereunder of the Company to close and issue and sell the Units to Purchaser at the Closing is subject to the satisfaction or waiver, at or before such Closing of the conditions set forth below. These conditions are for the Company’s sole benefit and may be waived by the Company at any time in their sole discretion.
6.1.1.
Accuracy of Purchaser’s Representations and Warranties. The representations and warranties of Purchaser shall be true and correct in all material respects as of the date when made and as of the Closing as though made at that time, except for representations and warranties that are expressly made as of a particular date, which shall be true and correct in all material respects as of such date.
6.1.2.
Performance by Purchaser. Purchaser shall have performed, satisfied, and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by Purchaser at or prior to the Closing.
6.1.3.
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
6.1.4.
Delivery of Purchase Price. The Purchase Price for the Units shall be available in cleared funds and authorized by the Company and Purchaser, in their sole and absolute discretion, for distribution on the Closing in accordance with the terms hereof.
6.1.5.
Receipt of Waivers. The Company shall have received the necessary Preemptive Rights Waiver and Share Reservation Waivers.
6.1.6.
Voting Agreements. The Company and each of Golden Post Rail, LLC, Ocean Partners UK Limited, and Gareth Nichol shall have entered into voting agreements (the “Voting Agreements”) pursuant to which such stockholders shall have agreed to vote all of their shares entitled to vote at the Stockholder Meeting in favor of the Amendment, in accordance with and subject to the terms and conditions of the Voting Agreements.
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6.2.
Conditions Precedent to the Obligation of Purchaser to Close and to Purchase the Units. The obligation hereunder of Purchaser to purchase the Units and consummate the transactions contemplated by this Agreement is subject to the satisfaction or waiver, at or before the Closing, of each of the conditions set forth below. These conditions are for Purchaser’s sole benefit and may be waived by Purchaser at any time in his sole discretion.
6.2.1.
Accuracy of the Company’s Representations and Warranties. Each of the representations and warranties of the Company in this Agreement shall be true and correct in all material respects as of the Closing, except for representations and warranties that speak as of a particular date, which shall be true and correct in all material respects as of such date.
6.2.2.
Performance by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing.
6.2.3.
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
6.2.4.
No Proceedings or Litigation. No action, suit or proceeding before any arbitrator or any governmental authority shall have been commenced, and no investigation by any governmental authority shall have been initiated, against the Company, or any of the officers, directors or affiliates of the Company seeking to restrain, prevent or change the transactions contemplated by this Agreement, or seeking damages in connection with such transactions.
6.2.5.
Units. At the Closing, the Company shall have delivered to Purchaser evidence of delivery of the Shares along with all appropriate board resolutions or other necessary documentation. The Company shall also deliver this Agreement and the Warrant, duly executed by the Company.
6.2.6.
Receipt of Waivers. The Company shall have received the necessary Preemptive Rights Waiver and Share Reservation Waivers.
6.2.7.
Voting Agreements. The Company and each of Golden Post Rail, LLC, Ocean Partners UK Limited, and Gareth Nichol shall have entered into the Voting Agreements.
7.
COVENANTS AND AGREEMENTS
7.1.
Use of Proceeds. The Company will use the net proceeds from the sale of the Units for a repayment of a portion of the credit facility provided to the Company, and for general corporate and working capital purposes. The Company agrees that, without the prior written consent of Purchaser, the Company will not use any such proceeds (i) to redeem, repurchase or otherwise acquire, or to make any distributions in respect of, any of the Company’s securities, (ii) to repay or otherwise satisfy any indebtedness of the Company (other than the aforementioned credit facility), or (iii) for any personal, family, or household purpose.
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7.2.
Satisfaction of Authorized Shares Condition. The Company covenants as follows with respect to the Authorized Shares Condition:
7.2.1.
Preliminary Proxy Statement. The Company shall prepare and file with the SEC a preliminary proxy statement (or preliminary information statement, if applicable) relating to the Authorized Shares Condition (the “Proxy Statement”) no later than thirty (30) days following the date of this Agreement. The Proxy Statement shall comply in all material respects with all applicable requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder.
7.2.2.
Definitive Proxy Statement. (A) If the SEC does not provide any comments on the Proxy Statement within the ten (10) day period following the filing of the preliminary Proxy Statement, the Company shall file the definitive Proxy Statement with the SEC promptly following the expiration of such ten (10) day period. (B) If the SEC provides comments on the Proxy Statement, the Company shall (i) respond to all such comments as promptly as practicable and use its reasonable best efforts to resolve all such comments with the SEC, and (ii) file the definitive Proxy Statement with the SEC within two (2) Business Days following the date on which the SEC confirms that it has no further comments on the Proxy Statement or otherwise clears the Proxy Statement for mailing. The Company shall promptly notify Purchaser of the receipt of any comments from the SEC on the Proxy Statement and shall provide Purchaser with copies of all correspondence between the Company and the SEC relating to the Proxy Statement.
7.2.3.
Stockholder Meeting. The Company shall duly call, give notice of, convene and hold a meeting of its stockholders (the “Stockholder Meeting”) for the purpose of obtaining stockholder approval of the Amendment and satisfaction of the Authorized Shares Condition no later than sixty (60) days following the date of filing of the definitive Proxy Statement. The Company shall use its reasonable best efforts to solicit proxies in favor of the Amendment and shall include in the Proxy Statement the recommendation of the Board of Directors that stockholders vote in favor of the Amendment. If on the date of the Stockholder Meeting, or a date preceding the date on which the Stockholder Meeting is scheduled, the Company reasonably believes that (i) it will not receive proxies sufficient to obtain stockholder approval of the Amendment, whether or not a quorum would be present, or (ii) it will not have a quorum, then the Company may adjourn or postpone the Stockholder Meeting; provided, however, that any such adjournment or postponement shall not extend beyond ninety (90) days following the date of this Agreement without the prior written consent of Purchaser.
7.2.4.
Filing of Amendment. Promptly following receipt of the requisite stockholder approval of the Amendment at the Stockholder Meeting, the Company shall file the Amendment with the Delaware Secretary of State and provide evidence of such filing to Purchaser.
7.2.5.
Reasonable Best Efforts. The Company shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to satisfy the Authorized Shares Condition as promptly as practicable; provided that the Company shall not be in default under this Agreement or the Warrant to the extent it exercises reasonable diligence in seeking to satisfy the Authorized Shares Condition; and provided, further, that in no event will the Company be in default under this Agreement or the Warrant if any failure of the Authorized Shares Condition results from the acts or omissions of Purchaser or
11
any other purchaser of the Units (i.e., failure of such purchaser to vote all of its shares entitled to vote on the Authorized Shares Increase in favor of the Authorized Shares Increase).
7.3.
Most Favored Nations. Other than other securities purchase agreements containing the same terms as this Agreement (other than the number of Units purchased), the Company has not entered into any side letter or similar agreement with any other subscriber, investor or potential investor in connection with such other subscriber’s, investor’s or potential investor’s direct or indirect investment in the Company or participation in the Offering. The Company represents, warrants, and covenants that it has not offered, and will not offer, to any other stockholder participating in the Offering any terms or conditions that are more favorable than those set forth in this Agreement. If, at any time on or after the date hereof, the Company offers or grants to any other stockholder participating in the Offering any rights, terms, or conditions that are more favorable than those provided to Purchaser under this Agreement (including, without limitation, with respect to the Purchase Price of the Units, warrant coverage, exercise price of the Warrant, anti-dilution protections, registration rights, information rights, board observation or participation rights, or any other economic or governance terms), then (a) the Company shall provide Purchaser with prompt written notice of such more favorable terms, and (b) such more favorable terms shall automatically and without further action by Purchaser be deemed to apply to Purchaser and this Agreement (and any related transaction documents) shall be deemed amended to incorporate such more favorable terms, effective as of the date such terms were first offered or granted to such other stockholder. If, at any time on or after the date hereof, the Company offers or grants to any other stockholder participating in the Offering any rights, terms, or conditions that are more favorable than those provided to Purchaser under this Agreement, then the Company shall promptly prepare an amendment to this Agreement, such that such more favorable terms shall be memorialized in the amendment and become binding upon the Company to the benefit of Purchaser.
7.4.
Standstill on Securities Issuances.
7.4.1.
From the date of this Agreement until such time as the Amendment has been duly filed with the Delaware Secretary of State (the “Standstill Period”), the Company shall not, without the prior written consent of Purchaser, directly or indirectly, issue, sell, grant or otherwise dispose of, or agree or commit to issue, sell, grant or otherwise dispose of, any shares of Common Stock, Preferred Stock, or any other equity securities of the Company, or any securities convertible into, exchangeable for, or exercisable for equity securities of the Company, or any options, warrants, or other rights to acquire any such equity securities.
7.4.2.
Notwithstanding the foregoing, the restrictions set forth in Section 7.4(i) shall not apply to: (A) the issuance of Units, Shares and Warrants pursuant to and in accordance with the terms of this Agreement and the Offering; and (B) other than those securities that are the subject of the Share Reservation Waivers, the issuance of shares of Common Stock upon the exercise or conversion of Derivative Securities outstanding as of the date hereof, in accordance with the terms of such Derivative Securities as in effect on the date hereof.
7.4.3.
The Company shall provide Purchaser with prompt written notice of the filing of the Amendment with the Delaware Secretary of State, together with evidence of such
12
filing, and upon such filing, the Standstill Period shall automatically terminate without further action by either party.
8.
MISCELLANEOUS.
8.1.
Governing Law. The validity and interpretation of this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. Each of the parties hereto and their assigns hereby consents to the exclusive jurisdiction and venue of the Courts of the State of Delaware, and the United States District Court for the State of Delaware with respect to any matter relating to this Agreement and performance of the parties’ obligations hereunder, the documents and instruments executed and delivered concurrently herewith or pursuant hereto and performance of the parties’ obligations thereunder and each of the parties hereto hereby consents to the personal jurisdiction of such courts and shall subject itself to such personal jurisdiction. Any action, suit or proceeding relating to such matters shall be commenced, pursued, defended and resolved only in such courts and any appropriate appellate court having jurisdiction to hear an appeal from any judgment entered in such courts. The parties irrevocably waive the defense of an inconvenient forum to the maintenance of such suit or proceeding. Service of process in any action, suit or proceeding relating to such matters may be made and served within or outside the State of Delaware by registered or certified mail to the parties and their representatives at their respective addresses specified in Section 8.6, providedthat a reasonable time, not less than thirty (30) days, is allowed for response. Service of process may also be made in such other manner as may be permissible under the applicable court rules. THE PARTIES HERETO WAIVE TRIAL BY JURY.
8.2.
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, executors, and administrators of the parties hereto.
8.3.
Entire Agreement. This Agreement and the exhibits and schedules attached hereto, and the other documents, including the Preemptive Rights Waiver and Share Reservation Waivers, delivered pursuant hereto and thereto, constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants, or agreements except as specifically set forth herein or therein. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto and their respective successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided herein.
8.4.
Severability. In case any provision of this Agreement shall be invalid, illegal, or unenforceable, it shall to the extent practicable, be modified so as to make it valid, legal and enforceable and to retain as nearly as practicable the intent of the parties, and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
8.5.
Amendment and Waiver. Except as otherwise provided herein, any term of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively, and either for a
13
specified period of time or indefinitely), with the written consent of the Company and Purchaser. Any amendment or waiver effected in accordance with this Section 8.5 shall be binding upon each future holder of any security purchased under this Agreement and the Company.
8.6.
Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be effective when delivered personally, or sent by facsimile and in each case with a confirming email (with receipt confirmed), provided that a copy is mailed by registered mail, return receipt requested, or when received by the addressee, if sent by Express Mail, Federal Express or other express delivery service (receipt requested) in each case to the appropriate address set forth below:
If to the Company: DynaResource, Inc.
The Urban Towers of Las Colinas
222 W. Las Colinas Blvd.
Suite 1910 North Tower
Las Colinas / Irving, TX 75039
Email: rhazelton@dynaresource.com
Attention: Rohan Hazelton
If to Purchaser: Gareth Nichol
5 Greenridge Road
Greenwood Village, CO 80111
Email: gaznichol@gmail.com
8.7.
Faxes, Electronic Mail and Counterparts. This Agreement may be executed in one or more counterparts. Delivery of an executed counterpart of the Agreement or any exhibit attached hereto by facsimile transmission or electronic mail (any such delivery, an “Electronic Delivery”), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto, each other party hereto shall re-execute original forms hereof and deliver them in person to all other parties. No party hereto shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense relates to lack of authenticity.
8.8.
Expenses. Except as specifically provided herein, each party shall bear its own costs and expenses, including legal and accounting fees, in connection with this Agreement and the transactions contemplated hereunder.
8.9.
Titles and Subtitles. The titles of the paragraphs and subparagraphs of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
8.10.
Further Assurances. At any time and from time to time after the Closing, upon reasonable request of the other, each party shall do, execute, acknowledge and deliver such
14
further acts, assignments, transfers, conveyances and assurances as may be reasonably required for the more complete consummation of the transactions contemplated herein.
[Signatures on following page]
15
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.
DYNARESOURCE, INC.
By: /s/ Rohan Hazelton
Name: Rohan Hazelton
Title: Chief Executive Officer
/s/ Gareth Nichol
Gareth Nichol
16
EXHIBIT A
Form of Warrant
[see attached]
[Form of Warrant]
SCHEDULE A
Derivative Securities
Name of Holder |
Title of Derivative Securities |
No. of Derivative Securities |
Golden Post Rail, LLC |
Series C Preferred Stock |
1,734,992 |
Golden Post Rail, LLC |
Series E Preferred Stock |
1,552,795 |
Golden Post Rail, LLC |
Series D Warrants |
783,976 |
Gareth Nichol |
Series D Preferred Stock |
500,000 |
Ronald Vail |
Series D Preferred Stock |
100,000 |
Dale Petrini |
Series D Preferred Stock |
50,000 |
Rohan Hazelton |
Options |
750,000 |
Quinton Hennigh |
Options |
400,000 |
[Schedule A]
SCHEDULE B
Capitalization
Preferred Stockholders
Name of Holder |
Class of Preferred Stock |
No. of Shares |
Golden Post Rail, LLC |
Series C |
1,734,992 |
Gareth Nichol |
Series D |
500,000 |
Ronald Vail |
Series D |
100,000 |
Dale Petrini |
Series D |
50,000 |
Thomas R. Tillander |
Series D |
35,000 |
Ralph C. Whalen |
Series D |
25,000 |
Paul Menegay |
Series D |
12,500 |
Jane Menegay |
Series D |
12,500 |
Duane Menegay |
Series D |
12,500 |
Paul Mark Woods |
Series D |
12,500 |
Golden Post Rail, LLC |
Series E |
1,552,795 |
Reserve Requirements
Category |
Reserve Requirements |
Derivative Securities (Series C, D, and E Preferred Stock and Series D Warrants) |
10,450,184 |
Outstanding Equity Awards |
3,592,142 |
Equity Incentive Plans (exclusive of Outstanding Equity Awards) |
1,020,358 |
Warrants (Current Offering) |
6,666,666 |
[Schedule B]
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is made as of September 1, 2026, by and between DYNARESOURCE, INC., a Delaware corporation (the “Company”), and JAY REDLINGSHAFER, an individual (“Purchaser”).
RECITALS
A.
The Company intends to issue and sell up to 6,666,666 units, each unit consisting of one share of its common stock, par value $0.01 per share (“Common Stock”), and one warrant to purchase one share of Common Stock at an exercise price of $0.51 per share in a private offering with certain existing stockholders of the Company on the terms set forth below (the “Offering”).
B.
In connection with the Offering, certain existing stockholders of the Company have agreed to, on a one-time basis and for a period of up to 120 days, (i) waive all share reservation obligations of the Company under any and all certificates, instruments, plans and/or agreements corresponding to the securities listed on Schedule Ahereto (the “Derivative Securities”), and (ii) not exercise or convert any Derivative Securities until such time as the Company files an amendment to its Amended and Restated Certificate of Incorporation, as amended, to either increase its number of authorized shares of Common Stock or effect a reverse stock split of the Common Stock, in each case to satisfy all share reservation obligations of the Company (the “Amendment”).
C.
As part of the Offering, the Board of Directors of the Company (the “Board of Directors”) has authorized the issuance to Purchaser for the aggregate purchase price set forth below (the “Purchase Price”), units (the “Units”), with each Unit consisting of (i) one share of Common Stock (such shares of Common Stock included in the Units, the “Shares”), and (ii) a warrant to purchase one share of Common Stock at an exercise price of $0.51 per share (the “Warrant,” and such shares of Common Stock issuable upon exercise of the Warrant, the “Warrant Shares”), each such Unit being sold at a purchase price of $0.45 per Unit.
D.
Purchaser wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, the Units.
NOW, THEREFORE, in consideration of the foregoing premises and in reliance on the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which the parties hereby acknowledge, it is agreed as follows:
1.
DEFINITIONS.
1.1.
“Authorized Shares Increase” means an increase of the authorized shares of Common Stock or reverse stock split to accommodate the exercise of the Warrant to purchase
1
the Warrant Shares in accordance with the terms of the Warrant (taking into account all issued and outstanding shares of Common Stock and all shares of Common Stock required to be reserved under all (a) outstanding Derivative Securities, (b) outstanding equity awards, and (c) Company equity incentive plans).
1.2.
“Authorized Shares Condition” means the approval by the requisite stockholders of the Company at a duly called meeting or by written consent of the Amendment and the filing of such Amendment with the Delaware Secretary of State.
1.3.
“Business Day” means any day other than a Saturday, Sunday, or any day on which banking institutions in the State of Texas are authorized or required by law, regulation, or executive order to close.
1.4.
“Series C Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series C Senior Convertible Preferred Stock, as amended.
1.5.
“Series D Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series D Convertible Preferred Stock, as amended.
1.6.
“Series E Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series E Convertible Preferred Stock, as amended.
1.7.
“Preemptive Rights Waiver” means the waiver by the Series C preferred stockholder of its preemptive rights and other anti-dilution protections under the Series C Designation in connection with the Offering.
1.8.
“Share Reservation Waivers” means (a) the waiver by the Series C and Series E preferred stockholder of the Company’s share reservation requirements under the Series C Designation and the Series E Designation, respectively; (b) the waiver by at least 85% of the Series D preferred stockholders of the Company’s share reservation requirements under the Series D Designation with respect to their Series D preferred stock; (c) the waiver by at least 88% of the Company’s existing warrant holders of the Company’s share reservation requirements under their outstanding warrants; (d) the waiver by all of the Company’s existing option holders of the Company’s share reservation requirements under their respective options; and (e) the agreement of each of the waiving Series C, D, and E preferred stockholders, warrant holders, and option holders not to convert or exercise, as applicable, any of their respective outstanding convertible preferred stock, warrants, and/or options, in each case, until after the Authorized Shares Condition is satisfied, subject to any other conditions set forth in such waivers.
2.
PURCHASE AND SALE OF UNITS.
2
2.1.
Purchase and Sale. In reliance upon the representations and warranties of the Company and Purchaser contained herein and subject to the terms and conditions set forth herein, at the Closing (as defined below), Purchaser shall purchase, and the Company shall sell and issue to Purchaser, 444,444 Units for an aggregate Purchase Price of $199,999.80 (based on a purchase price of $0.45 per Unit), which Purchase Price was delivered by Purchaser to the Company by wire transfer of good funds to the account specified by the Company in advance of signing this Agreement.
2.2.
Issuance of Warrant. The Warrant shall be in the form attached hereto as Exhibit A and shall be exercisable for a period commencing on the date the Authorized Shares Condition is satisfied and ending at 5:00 p.m., Central time, on the later of (a) 180 days following the issuance date of the Warrant, and (b) 30 days following the satisfaction of the Authorized Shares Condition (the “Exercise Period”) at an exercise price of $0.51 per Warrant Share, subject to adjustment as provided therein.
3.
CLOSING.
3.1.
Date and Time. The sale of Units will take place at a closing (the “Closing”) at the offices of the Company or at such other place (or remotely) as the Company and Purchaser shall agree in writing concurrent with the execution of this Agreement.
4.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
As a material inducement to Purchaser to enter into this Agreement and to purchase the Units, the Company represents and warrants that the following statements are true and correct in all material respects as of the date hereof and will be true and correct in all material respects at Closing, except as expressly qualified or modified herein.
4.1.
Organization and Good Standing. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has full corporate power and authority to enter into and perform its obligations under this Agreement, and to own its properties and to carry on its business in all jurisdictions as presently conducted and as proposed to be conducted. The Company and its subsidiaries have all governmental and other licenses and permits and authorizations to do business in all jurisdictions where their activities require such licenses, permits and authorizations, except where failure to obtain any such license, permit or authorization will not have a material adverse effect on the Company’s business.
4.2.
Capitalization. As of immediately prior to the Closing, the Company was authorized to issue 60,001,000 shares of capital stock, consisting of 40,000,000 shares of Common Stock and 20,001,000 shares of Preferred Stock (the “Preferred Stock”), of which 30,149,059 shares of Common Stock, 1,734,992 shares of Series C Preferred Stock, 760,000 shares of Series D Preferred Stock and 1,552,795 shares of Series E Preferred Stock were issued and outstanding. All outstanding shares of the Company’s capital stock have been duly authorized and validly issued, and are fully paid, non-assessable, and free of any pre-emptive rights, other than those certain preemptive rights set forth in the Series C Designation. Schedule B hereto sets forth a complete and accurate list of (a) the number, class and beneficial owners of the Preferred Stock as of the date hereof and (b) the reserve requirements of the Company with respect to shares of
3
Common Stock required to be reserved under all (w) outstanding Derivative Securities, (x) outstanding equity awards, (y) Company equity incentive plans and (z) the Warrants offered in connection with the Offering.
4.3.
Authorization and Enforcement. This Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights generally and to general principles of equity. The Company has full corporate power and authority necessary to enter into and deliver this Agreement and to perform its obligations hereunder.
4.4.
Reservation and Valid Issuance of Securities. Upon payment of the Purchase Price and issuance of the Units, (i) the Shares will be duly authorized, validly issued, fully paid, non-assessable and free of pre-emptive rights, (ii) the Warrant will be duly authorized, validly executed and delivered, and will constitute legal, valid and binding obligations of the Company, enforceable in accordance with its terms, and (iii) the Warrant Shares, when issued and paid for upon exercise of the Warrant in accordance with its terms, will be duly authorized, validly issued, fully paid, non-assessable and free of pre-emptive rights.
4.5.
Reservation of Warrant Shares. During the Exercise Period, the Company shall have reserved from its duly authorized capital stock the number of shares of Common Stock issuable upon exercise of the Warrant.
4.6.
No Conflict, Breach, Violation or Default; Third Party Consents. The execution, delivery and performance of this Agreement and the Warrant by the Company and the issuance and sale of the Units, including the Shares and the Warrant, and the issuance of the Warrant Shares upon exercise of the Warrant, will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under (i) the Company’s Amended and Restated Certificate of Incorporation, as amended, or the Company’s Bylaws, both as in effect on the date hereof (collectively, the “Company Documents”), (ii) any shareholder agreement or voting agreement to which any officer, director or holder of more than 5% of the Company’s securities is a party, (iii) any statute, rule, regulation or order of any governmental agency, self-regulatory agency, securities regulatory or insurance regulatory agency or body or any court, domestic or foreign, having jurisdiction over the Company or any of its assets or properties, or (iv) any material agreement or instrument to which the Company is a party or by which the Company is bound or to which any of its assets or properties is subject; except in the case of each of clauses (iii) and (iv), such as could not, individually or in the aggregate, have or reasonably be expected to result in a material adverse effect on the Company or its ability to perform its obligations hereunder. No approval of or filing with any governmental authority or other third-party entity or person is required for the Company to enter into, execute or perform this Agreement, the Warrant or any related transaction document.
4.7.
SEC Reports and Financial Statements.
4.7.1.
SEC Reports. The Company has made available to Purchaser through the SEC’s EDGAR system accurate and complete copies (excluding copies of exhibits) of
4
each report, quarterly report, annual report, current report, registration statement, and definitive proxy statement or information statement filed by the Company with the United States Securities and Exchange Commission (“SEC”) since December 31, 2023 (collectively, the “SEC Reports”). All statements, reports, schedules, forms and other documents required to have been filed by the Company with the SEC have been so filed. To the Company’s Knowledge, as of the time it was filed with the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing): (i) each of the SEC Reports complied in all material respects with the applicable requirements of the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as applicable; and (ii) none of the SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
4.7.2.
Financial Statements. The financial statements contained in the SEC Reports: (i) complied as to form in all material respects with the published rules and regulations of the SEC applicable thereto at the time of filing and as of the date of the Closing; (ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered (except as may be indicated in the notes to such financial statements and, in the case of unaudited statements, as permitted by Form 10-Q of the SEC, and except that unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end audit adjustments which will not, individually or in the aggregate, be material in amount); and (iii) fairly present, in all material respects, the financial position of the Company as of the respective dates thereof and the results of operations of the Company for the periods covered thereby, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. All adjustments considered necessary for a fair presentation of the financial statements have been included.
4.7.3.
Securities Law Compliance. Assuming the accuracy of the representations and warranties of Purchaser and each other purchaser, set forth in Section 5 of this Agreement or such other purchasers’ applicable securities purchase agreement, the offer and sale of the Units (including the Shares and the Warrant) and the issuance of the Warrant Shares upon exercise of the Warrant will constitute an exempted transaction under the Securities Act, and registration of the Units, Shares, Warrant and Warrant Shares is not required. The Company shall make such filings as may be necessary to comply with the federal securities laws and the “blue sky” laws of any state in connection with the offer and sale of the Units and the issuance of the Warrant Shares, which filings will be made in a timely manner.
4.7.4.
For the purposes of this Agreement, “Company’s Knowledge” means the actual knowledge of the executive officers (as defined in Rule 405 under the Securities Act) of the Company.
4.8.
Compliance with Law; No Disqualification.
4.8.1.
OFAC. Neither the Company nor any of its affiliates or any of their respective directors, officers, employees or agents is a Person that is, or is owned or controlled by Persons that are: (A) the subject of any sanctions administered by the U.S. Department of Treasury’s Office of Foreign Assets Control or the U.S. Department of State, the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions
5
authority (collectively, “Sanctions”), or (B) located, organized or resident in a country or territory that is the subject of Sanctions. Neither the Company nor any of its affiliates has engaged in, or is now engaged in, directly or indirectly, any dealings or transactions with any Person, or in any country or territory, that, at the time of the dealing or transaction, is or was the subject of Sanctions.
4.8.2.
Foreign Corrupt Practices Act. Neither the Company nor any director, officer, or employee of the Company, or to the Company’s Knowledge, any other person associated with or acting on behalf of the Company, including, without limitation, any agent or affiliate of the Company has (a) used any corporate funds for any unlawful contribution, gift, entertainment, or other unlawful expense relating to political activity or to influence official action; (b) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (c) made any bribe, rebate, payoff, influence payment, kickback, or other unlawful payment; or (d) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder; and the Company has instituted and maintains policies and procedures designed to ensure compliance therewith.
4.8.3.
No Disqualification Events. With respect to the Units (including the Shares, Warrant and Warrant Shares), neither the Company, nor any of its predecessors, directors, executive officers, or any beneficial owner (as that term is defined in Rule 13d-3 under the Exchange Act) of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale of the Units (each, an “Company Covered Person” and, collectively, “Company Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. The Company has exercised reasonable care to determine (i) the identity of each person that is a Company Covered Person; and (ii) whether any Company Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e) under the Securities Act, and has furnished to Purchaser a copy of any disclosures provided thereunder.
4.9.
No Directed Selling Efforts or General Solicitation. Neither the Company nor any Person, as defined below, acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D promulgated under the Securities Act) in connection with the offer or sale of any of the Units (including the Shares and the Warrant). For purposes of this Agreement, “Person” means any individual, corporation, company, limited liability company, partnership, limited liability partnership, trust, estate, proprietorship, joint venture, association, organization or entity.
4.10.
Solvency. As of the date of this Agreement (assuming the closing of the Offering), the Company is solvent. For purposes of this Section 4.10, the Company shall be deemed to be solvent if (a) the fair value of its assets exceeds its total liabilities, and (b) the Company is able to pay its debts as they become due in the ordinary course of business.
5.
REPRESENTATIONS AND WARRANTIES OF PURCHASER.
6
Purchaser hereby represents, warrants and covenants to the Company as follows:
5.1.
Legal Power. Purchaser has the requisite power and is authorized to enter into this Agreement, to purchase the Units hereunder, and to carry out and perform his obligations under the terms of this Agreement.
5.2.
Due Execution. This Agreement has been duly authorized, executed and delivered by Purchaser, and, upon due execution and delivery by the Company, this Agreement will be a valid and binding agreement of Purchaser.
5.3.
Access to Information. Purchaser understands that an investment in the Units involves a high degree of risk and long term or permanent illiquidity, including, risk of loss of their entire investment. Purchaser has been given full and complete access to the Company for the purpose of obtaining such information as Purchaser or his qualified representative has reasonably requested in connection with the decision to purchase the Units. Purchaser represents that Purchaser has received and reviewed copies of the SEC Reports. Purchaser represents that Purchaser has been afforded the opportunity to ask questions of the officers of the Company regarding its business prospects and the Units, all as Purchaser or Purchaser’s investor’s representatives have deemed necessary to make an informed investment decision to purchase the Units.
5.4.
Restricted Securities.
5.4.1.
Purchaser has been advised that none of the Units, including the Shares and the Warrant underlying the Units, or the Warrant Shares, have been registered under the Securities Act or any other applicable securities laws and that the Units are being offered and sold pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D thereunder, and that the Company’s reliance upon Section 4(a)(2) and/or Rule 506 of Regulation D is predicated in part on such Purchaser representations as contained herein. Purchaser acknowledges that the Shares, Warrant and Warrant Shares will be issued as “restricted securities” as defined by Rule 144 promulgated pursuant to the Securities Act. None of the Shares, Warrant or Warrant Shares may be resold in the absence of an effective registration thereof under the Securities Act and applicable state securities laws unless, in the opinion of counsel reasonably satisfactory to the Company, an applicable exemption from registration is available.
5.4.2.
Purchaser represents that Purchaser is acquiring the Units for Purchaser’s own account, and not as nominee or agent, for investment purposes only and not with a view to, or for sale in connection with, a distribution, as that term is used in Section 2(11) of the Securities Act, in a manner which would require registration under the Securities Act or any state securities laws.
5.4.3.
Purchaser understands and acknowledges that the certificates or book-entry statements representing the Shares and the Warrant will bear substantially the following legend:
“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE SOLD,
7
DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES OR (ii) THE SECURITIES ARE SOLD PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. NOTWITHSTANDING THE FOREGOING, NO NOTICE TO OR CONSENT OF THE COMPANY SHALL BE REQUIRED IN CONNECTION WITH ANY SUCH SALE OR TRANSFERS.”
5.4.4.
Purchaser acknowledges that an investment in the Units is not liquid and is transferable only under limited conditions. Purchaser acknowledges that the Shares, Warrant and Warrant Shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Purchaser is aware of the provisions of Rule 144 promulgated under the Securities Act, which permits limited resale of restricted securities subject to the satisfaction of certain conditions and that such Rule is not now available and, in the future, may not become available for resale of any of the Shares, Warrant or Warrant Shares.
5.5.
Accredited Investor; Sophistication and Ability to Bear Risk of Loss. Purchaser is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act as of the date hereof and at any time he exercises the Warrant. Purchaser acknowledges that he is able to protect his interests in connection with the acquisition of the Units and can bear the economic risk of investment in such securities without producing a material adverse change in Purchaser’s financial condition. Purchaser has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of an investment in the Units.
5.6.
No Advertising. Purchaser has not received any general solicitation or advertising regarding the offer of the Units.
5.7.
Public Statements. Purchaser agrees not to issue any public statement with respect to the offering of the Units, Purchaser’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law.
5.8.
Confidential. Purchaser acknowledges that the information made available to Purchaser other than the SEC Reports is confidential and non-public and agrees that all such information shall be kept in confidence by Purchaser and neither used by Purchaser for Purchaser’s own benefit (other than in connection with this subscription) nor disclosed to any third party for any reason; provided, however, that (a) Purchaser may disclose such information to his affiliates and advisors who may have a need for such information in connection with providing advice to Purchaser with respect to its investment in the Company so long as such affiliates and advisors have an obligation of confidentiality, (b) this obligation shall not apply to any such information that (i) is part of the public knowledge or literature and readily accessible at the date hereof, (ii) becomes part of the public knowledge or literature and readily accessible by publication (except as a result of a breach of this provision), (iii) is being disclosed pursuant to a subpoena or court order or is otherwise required to be provided by law, or (iv) is received from third parties without an obligation of confidentiality (except third parties who disclose such information in violation of
8
any confidentiality agreements or obligations, including, without limitation, any subscription or other similar agreement entered into with the Company) and (c) Purchaser may disclose such information as is necessary to enforce the terms of this Agreement.
5.9.
Exempt Offering. Purchaser understands that the Units are being offered and sold to him in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of Purchaser in order to determine the availability of such exemptions and the eligibility of Purchaser to acquire the Units.
6.
CONDITIONS.
6.1.
Conditions Precedent to the Obligation of the Company to Close and to Sell the Units. The obligation hereunder of the Company to close and issue and sell the Units to Purchaser at the Closing is subject to the satisfaction or waiver, at or before such Closing of the conditions set forth below. These conditions are for the Company’s sole benefit and may be waived by the Company at any time in their sole discretion.
6.1.1.
Accuracy of Purchaser’s Representations and Warranties. The representations and warranties of Purchaser shall be true and correct in all material respects as of the date when made and as of the Closing as though made at that time, except for representations and warranties that are expressly made as of a particular date, which shall be true and correct in all material respects as of such date.
6.1.2.
Performance by Purchaser. Purchaser shall have performed, satisfied, and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by Purchaser at or prior to the Closing.
6.1.3.
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
6.1.4.
Delivery of Purchase Price. The Purchase Price for the Units shall be available in cleared funds and authorized by the Company and Purchaser, in their sole and absolute discretion, for distribution on the Closing in accordance with the terms hereof.
6.1.5.
Receipt of Waivers. The Company shall have received the necessary Preemptive Rights Waiver and Share Reservation Waivers.
6.1.6.
Voting Agreements. The Company and each of Golden Post Rail, LLC, Ocean Partners UK Limited, and Gareth Nichol shall have entered into voting agreements (the “Voting Agreements”) pursuant to which such stockholders shall have agreed to vote all of their shares entitled to vote at the Stockholder Meeting in favor of the Amendment, in accordance with and subject to the terms and conditions of the Voting Agreements.
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6.2.
Conditions Precedent to the Obligation of Purchaser to Close and to Purchase the Units. The obligation hereunder of Purchaser to purchase the Units and consummate the transactions contemplated by this Agreement is subject to the satisfaction or waiver, at or before the Closing, of each of the conditions set forth below. These conditions are for Purchaser’s sole benefit and may be waived by Purchaser at any time in his sole discretion.
6.2.1.
Accuracy of the Company’s Representations and Warranties. Each of the representations and warranties of the Company in this Agreement shall be true and correct in all material respects as of the Closing, except for representations and warranties that speak as of a particular date, which shall be true and correct in all material respects as of such date.
6.2.2.
Performance by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing.
6.2.3.
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
6.2.4.
No Proceedings or Litigation. No action, suit or proceeding before any arbitrator or any governmental authority shall have been commenced, and no investigation by any governmental authority shall have been initiated, against the Company, or any of the officers, directors or affiliates of the Company seeking to restrain, prevent or change the transactions contemplated by this Agreement, or seeking damages in connection with such transactions.
6.2.5.
Units. At the Closing, the Company shall have delivered to Purchaser evidence of delivery of the Shares along with all appropriate board resolutions or other necessary documentation. The Company shall also deliver this Agreement and the Warrant, duly executed by the Company.
6.2.6.
Receipt of Waivers. The Company shall have received the necessary Preemptive Rights Waiver and Share Reservation Waivers.
6.2.7.
Voting Agreements. The Company and each of Golden Post Rail, LLC, Ocean Partners UK Limited, and Gareth Nichol shall have entered into the Voting Agreements.
7.
COVENANTS AND AGREEMENTS
7.1.
Use of Proceeds. The Company will use the net proceeds from the sale of the Units for a repayment of a portion of the credit facility provided to the Company, and for general corporate and working capital purposes. The Company agrees that, without the prior written consent of Purchaser, the Company will not use any such proceeds (i) to redeem, repurchase or otherwise acquire, or to make any distributions in respect of, any of the Company’s securities, (ii) to repay or otherwise satisfy any indebtedness of the Company (other than the aforementioned credit facility), or (iii) for any personal, family, or household purpose.
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7.2.
Satisfaction of Authorized Shares Condition. The Company covenants as follows with respect to the Authorized Shares Condition:
7.2.1.
Preliminary Proxy Statement. The Company shall prepare and file with the SEC a preliminary proxy statement (or preliminary information statement, if applicable) relating to the Authorized Shares Condition (the “Proxy Statement”) no later than thirty (30) days following the date of this Agreement. The Proxy Statement shall comply in all material respects with all applicable requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder.
7.2.2.
Definitive Proxy Statement. (A) If the SEC does not provide any comments on the Proxy Statement within the ten (10) day period following the filing of the preliminary Proxy Statement, the Company shall file the definitive Proxy Statement with the SEC promptly following the expiration of such ten (10) day period. (B) If the SEC provides comments on the Proxy Statement, the Company shall (i) respond to all such comments as promptly as practicable and use its reasonable best efforts to resolve all such comments with the SEC, and (ii) file the definitive Proxy Statement with the SEC within two (2) Business Days following the date on which the SEC confirms that it has no further comments on the Proxy Statement or otherwise clears the Proxy Statement for mailing. The Company shall promptly notify Purchaser of the receipt of any comments from the SEC on the Proxy Statement and shall provide Purchaser with copies of all correspondence between the Company and the SEC relating to the Proxy Statement.
7.2.3.
Stockholder Meeting. The Company shall duly call, give notice of, convene and hold a meeting of its stockholders (the “Stockholder Meeting”) for the purpose of obtaining stockholder approval of the Amendment and satisfaction of the Authorized Shares Condition no later than sixty (60) days following the date of filing of the definitive Proxy Statement. The Company shall use its reasonable best efforts to solicit proxies in favor of the Amendment and shall include in the Proxy Statement the recommendation of the Board of Directors that stockholders vote in favor of the Amendment. If on the date of the Stockholder Meeting, or a date preceding the date on which the Stockholder Meeting is scheduled, the Company reasonably believes that (i) it will not receive proxies sufficient to obtain stockholder approval of the Amendment, whether or not a quorum would be present, or (ii) it will not have a quorum, then the Company may adjourn or postpone the Stockholder Meeting; provided, however, that any such adjournment or postponement shall not extend beyond ninety (90) days following the date of this Agreement without the prior written consent of Purchaser.
7.2.4.
Filing of Amendment. Promptly following receipt of the requisite stockholder approval of the Amendment at the Stockholder Meeting, the Company shall file the Amendment with the Delaware Secretary of State and provide evidence of such filing to Purchaser.
7.2.5.
Reasonable Best Efforts. The Company shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to satisfy the Authorized Shares Condition as promptly as practicable; provided that the Company shall not be in default under this Agreement or the Warrant to the extent it exercises reasonable diligence in seeking to satisfy the Authorized Shares Condition; and provided, further, that in no event will the Company be in default under this Agreement or the Warrant if any failure of the Authorized Shares Condition results from the acts or omissions of Purchaser or
11
any other purchaser of the Units (i.e., failure of such purchaser to vote all of its shares entitled to vote on the Authorized Shares Increase in favor of the Authorized Shares Increase).
7.3.
Most Favored Nations. Other than other securities purchase agreements containing the same terms as this Agreement (other than the number of Units purchased), the Company has not entered into any side letter or similar agreement with any other subscriber, investor or potential investor in connection with such other subscriber’s, investor’s or potential investor’s direct or indirect investment in the Company or participation in the Offering. The Company represents, warrants, and covenants that it has not offered, and will not offer, to any other stockholder participating in the Offering any terms or conditions that are more favorable than those set forth in this Agreement. If, at any time on or after the date hereof, the Company offers or grants to any other stockholder participating in the Offering any rights, terms, or conditions that are more favorable than those provided to Purchaser under this Agreement (including, without limitation, with respect to the Purchase Price of the Units, warrant coverage, exercise price of the Warrant, anti-dilution protections, registration rights, information rights, board observation or participation rights, or any other economic or governance terms), then (a) the Company shall provide Purchaser with prompt written notice of such more favorable terms, and (b) such more favorable terms shall automatically and without further action by Purchaser be deemed to apply to Purchaser and this Agreement (and any related transaction documents) shall be deemed amended to incorporate such more favorable terms, effective as of the date such terms were first offered or granted to such other stockholder. If, at any time on or after the date hereof, the Company offers or grants to any other stockholder participating in the Offering any rights, terms, or conditions that are more favorable than those provided to Purchaser under this Agreement, then the Company shall promptly prepare an amendment to this Agreement, such that such more favorable terms shall be memorialized in the amendment and become binding upon the Company to the benefit of Purchaser.
7.4.
Standstill on Securities Issuances.
7.4.1.
From the date of this Agreement until such time as the Amendment has been duly filed with the Delaware Secretary of State (the “Standstill Period”), the Company shall not, without the prior written consent of Purchaser, directly or indirectly, issue, sell, grant or otherwise dispose of, or agree or commit to issue, sell, grant or otherwise dispose of, any shares of Common Stock, Preferred Stock, or any other equity securities of the Company, or any securities convertible into, exchangeable for, or exercisable for equity securities of the Company, or any options, warrants, or other rights to acquire any such equity securities.
7.4.2.
Notwithstanding the foregoing, the restrictions set forth in Section 7.4(i) shall not apply to: (A) the issuance of Units, Shares and Warrants pursuant to and in accordance with the terms of this Agreement and the Offering; and (B) other than those securities that are the subject of the Share Reservation Waivers, the issuance of shares of Common Stock upon the exercise or conversion of Derivative Securities outstanding as of the date hereof, in accordance with the terms of such Derivative Securities as in effect on the date hereof.
7.4.3.
The Company shall provide Purchaser with prompt written notice of the filing of the Amendment with the Delaware Secretary of State, together with evidence of such
12
filing, and upon such filing, the Standstill Period shall automatically terminate without further action by either party.
8.
MISCELLANEOUS.
8.1.
Governing Law. The validity and interpretation of this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. Each of the parties hereto and their assigns hereby consents to the exclusive jurisdiction and venue of the Courts of the State of Delaware, and the United States District Court for the State of Delaware with respect to any matter relating to this Agreement and performance of the parties’ obligations hereunder, the documents and instruments executed and delivered concurrently herewith or pursuant hereto and performance of the parties’ obligations thereunder and each of the parties hereto hereby consents to the personal jurisdiction of such courts and shall subject itself to such personal jurisdiction. Any action, suit or proceeding relating to such matters shall be commenced, pursued, defended and resolved only in such courts and any appropriate appellate court having jurisdiction to hear an appeal from any judgment entered in such courts. The parties irrevocably waive the defense of an inconvenient forum to the maintenance of such suit or proceeding. Service of process in any action, suit or proceeding relating to such matters may be made and served within or outside the State of Delaware by registered or certified mail to the parties and their representatives at their respective addresses specified in Section 8.6, providedthat a reasonable time, not less than thirty (30) days, is allowed for response. Service of process may also be made in such other manner as may be permissible under the applicable court rules. THE PARTIES HERETO WAIVE TRIAL BY JURY.
8.2.
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, executors, and administrators of the parties hereto.
8.3.
Entire Agreement. This Agreement and the exhibits and schedules attached hereto, and the other documents, including the Preemptive Rights Waiver and Share Reservation Waivers, delivered pursuant hereto and thereto, constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants, or agreements except as specifically set forth herein or therein. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto and their respective successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided herein.
8.4.
Severability. In case any provision of this Agreement shall be invalid, illegal, or unenforceable, it shall to the extent practicable, be modified so as to make it valid, legal and enforceable and to retain as nearly as practicable the intent of the parties, and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
8.5.
Amendment and Waiver. Except as otherwise provided herein, any term of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively, and either for a
13
specified period of time or indefinitely), with the written consent of the Company and Purchaser. Any amendment or waiver effected in accordance with this Section 8.5 shall be binding upon each future holder of any security purchased under this Agreement and the Company.
8.6.
Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be effective when delivered personally, or sent by facsimile and in each case with a confirming email (with receipt confirmed), provided that a copy is mailed by registered mail, return receipt requested, or when received by the addressee, if sent by Express Mail, Federal Express or other express delivery service (receipt requested) in each case to the appropriate address set forth below:
If to the Company: DynaResource, Inc.
The Urban Towers of Las Colinas
222 W. Las Colinas Blvd.
Suite 1910 North Tower
Las Colinas / Irving, TX 75039
Email: rhazelton@dynaresource.com
Attention: Rohan Hazelton
If to Purchaser: Jay Redlingshafer
500 South Warson Road
Ladue, MO 63124
Email: jayr@landandapartments.com
8.7.
Faxes, Electronic Mail and Counterparts. This Agreement may be executed in one or more counterparts. Delivery of an executed counterpart of the Agreement or any exhibit attached hereto by facsimile transmission or electronic mail (any such delivery, an “Electronic Delivery”), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto, each other party hereto shall re-execute original forms hereof and deliver them in person to all other parties. No party hereto shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense relates to lack of authenticity.
8.8.
Expenses. Except as specifically provided herein, each party shall bear its own costs and expenses, including legal and accounting fees, in connection with this Agreement and the transactions contemplated hereunder.
8.9.
Titles and Subtitles. The titles of the paragraphs and subparagraphs of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
8.10.
Further Assurances. At any time and from time to time after the Closing, upon reasonable request of the other, each party shall do, execute, acknowledge and deliver such
14
further acts, assignments, transfers, conveyances and assurances as may be reasonably required for the more complete consummation of the transactions contemplated herein.
[Signatures on following page]
15
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.
DYNARESOURCE, INC.
By: /s/ Rohan Hazelton
Name: Rohan Hazelton
Title: Chief Executive Officer
/s/ Jay Redlingshafer
Jay Redlingshafer
16
EXHIBIT A
Form of Warrant
[see attached]
[Form of Warrant]
SCHEDULE A
Derivative Securities
Name of Holder |
Title of Derivative Securities |
No. of Derivative Securities |
Golden Post Rail, LLC |
Series C Preferred Stock |
1,734,992 |
Golden Post Rail, LLC |
Series E Preferred Stock |
1,552,795 |
Golden Post Rail, LLC |
Series D Warrants |
783,976 |
Gareth Nichol |
Series D Preferred Stock |
500,000 |
Ronald Vail |
Series D Preferred Stock |
100,000 |
Dale Petrini |
Series D Preferred Stock |
50,000 |
Rohan Hazelton |
Options |
750,000 |
Quinton Hennigh |
Options |
400,000 |
[Schedule A]
SCHEDULE B
Capitalization
Preferred Stockholders
Name of Holder |
Class of Preferred Stock |
No. of Shares |
Golden Post Rail, LLC |
Series C |
1,734,992 |
Gareth Nichol |
Series D |
500,000 |
Ronald Vail |
Series D |
100,000 |
Dale Petrini |
Series D |
50,000 |
Thomas R. Tillander |
Series D |
35,000 |
Ralph C. Whalen |
Series D |
25,000 |
Paul Menegay |
Series D |
12,500 |
Jane Menegay |
Series D |
12,500 |
Duane Menegay |
Series D |
12,500 |
Paul Mark Woods |
Series D |
12,500 |
Golden Post Rail, LLC |
Series E |
1,552,795 |
Reserve Requirements
Category |
Reserve Requirements |
Derivative Securities (Series C, D, and E Preferred Stock and Series D Warrants) |
10,450,184 |
Outstanding Equity Awards |
3,592,142 |
Equity Incentive Plans (exclusive of Outstanding Equity Awards) |
1,020,358 |
Warrants (Current Offering) |
6,666,666 |
[Schedule B]
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is made as of September 1, 2026, by and between DYNARESOURCE, INC., a Delaware corporation (the “Company”), and SMITH FIRST FAMILY L.P., Texas limited partnership (“Purchaser”).
RECITALS
A.
The Company intends to issue and sell up to 6,666,666 units, each unit consisting of one share of its common stock, par value $0.01 per share (“Common Stock”), and one warrant to purchase one share of Common Stock at an exercise price of $0.51 per share in a private offering with certain existing stockholders of the Company on the terms set forth below (the “Offering”).
B.
In connection with the Offering, certain existing stockholders of the Company have agreed to, on a one-time basis and for a period of up to 120 days, (i) waive all share reservation obligations of the Company under any and all certificates, instruments, plans and/or agreements corresponding to the securities listed on Schedule Ahereto (the “Derivative Securities”), and (ii) not exercise or convert any Derivative Securities until such time as the Company files an amendment to its Amended and Restated Certificate of Incorporation, as amended, to either increase its number of authorized shares of Common Stock or effect a reverse stock split of the Common Stock, in each case to satisfy all share reservation obligations of the Company (the “Amendment”).
C.
As part of the Offering, the Board of Directors of the Company (the “Board of Directors”) has authorized the issuance to Purchaser for the aggregate purchase price set forth below (the “Purchase Price”), units (the “Units”), with each Unit consisting of (i) one share of Common Stock (such shares of Common Stock included in the Units, the “Shares”), and (ii) a warrant to purchase one share of Common Stock at an exercise price of $0.51 per share (the “Warrant,” and such shares of Common Stock issuable upon exercise of the Warrant, the “Warrant Shares”), each such Unit being sold at a purchase price of $0.45 per Unit.
D.
Purchaser wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, the Units.
NOW, THEREFORE, in consideration of the foregoing premises and in reliance on the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which the parties hereby acknowledge, it is agreed as follows:
1.
DEFINITIONS.
1.1.
“Authorized Shares Increase” means an increase of the authorized shares of Common Stock or reverse stock split to accommodate the exercise of the Warrant to purchase
1
the Warrant Shares in accordance with the terms of the Warrant (taking into account all issued and outstanding shares of Common Stock and all shares of Common Stock required to be reserved under all (a) outstanding Derivative Securities, (b) outstanding equity awards, and (c) Company equity incentive plans).
1.2.
“Authorized Shares Condition” means the approval by the requisite stockholders of the Company at a duly called meeting or by written consent of the Amendment and the filing of such Amendment with the Delaware Secretary of State.
1.3.
“Business Day” means any day other than a Saturday, Sunday, or any day on which banking institutions in the State of Texas are authorized or required by law, regulation, or executive order to close.
1.4.
“Series C Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series C Senior Convertible Preferred Stock, as amended.
1.5.
“Series D Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series D Convertible Preferred Stock, as amended.
1.6.
“Series E Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series E Convertible Preferred Stock, as amended.
1.7.
“Preemptive Rights Waiver” means the waiver by the Series C preferred stockholder of its preemptive rights and other anti-dilution protections under the Series C Designation in connection with the Offering.
1.8.
“Share Reservation Waivers” means (a) the waiver by the Series C and Series E preferred stockholder of the Company’s share reservation requirements under the Series C Designation and the Series E Designation, respectively; (b) the waiver by at least 85% of the Series D preferred stockholders of the Company’s share reservation requirements under the Series D Designation with respect to their Series D preferred stock; (c) the waiver by at least 88% of the Company’s existing warrant holders of the Company’s share reservation requirements under their outstanding warrants; (d) the waiver by all of the Company’s existing option holders of the Company’s share reservation requirements under their respective options; and (e) the agreement of each of the waiving Series C, D, and E preferred stockholders, warrant holders, and option holders not to convert or exercise, as applicable, any of their respective outstanding convertible preferred stock, warrants, and/or options, in each case, until after the Authorized Shares Condition is satisfied, subject to any other conditions set forth in such waivers.
2.
PURCHASE AND SALE OF UNITS.
2
2.1.
Purchase and Sale. In reliance upon the representations and warranties of the Company and Purchaser contained herein and subject to the terms and conditions set forth herein, at the Closing (as defined below), Purchaser shall purchase, and the Company shall sell and issue to Purchaser, 44,444 Units for an aggregate Purchase Price of $19,999.80 (based on a purchase price of $0.45 per Unit), which Purchase Price was delivered by Purchaser to the Company by wire transfer of good funds to the account specified by the Company in advance of signing this Agreement.
2.2.
Issuance of Warrant. The Warrant shall be in the form attached hereto as Exhibit A and shall be exercisable for a period commencing on the date the Authorized Shares Condition is satisfied and ending at 5:00 p.m., Central time, on the later of (a) 180 days following the issuance date of the Warrant, and (b) 30 days following the satisfaction of the Authorized Shares Condition (the “Exercise Period”) at an exercise price of $0.51 per Warrant Share, subject to adjustment as provided therein.
3.
CLOSING.
3.1.
Date and Time. The sale of Units will take place at a closing (the “Closing”) at the offices of the Company or at such other place (or remotely) as the Company and Purchaser shall agree in writing concurrent with the execution of this Agreement.
4.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
As a material inducement to Purchaser to enter into this Agreement and to purchase the Units, the Company represents and warrants that the following statements are true and correct in all material respects as of the date hereof and will be true and correct in all material respects at Closing, except as expressly qualified or modified herein.
4.1.
Organization and Good Standing. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has full corporate power and authority to enter into and perform its obligations under this Agreement, and to own its properties and to carry on its business in all jurisdictions as presently conducted and as proposed to be conducted. The Company and its subsidiaries have all governmental and other licenses and permits and authorizations to do business in all jurisdictions where their activities require such licenses, permits and authorizations, except where failure to obtain any such license, permit or authorization will not have a material adverse effect on the Company’s business.
4.2.
Capitalization. As of immediately prior to the Closing, the Company was authorized to issue 60,001,000 shares of capital stock, consisting of 40,000,000 shares of Common Stock and 20,001,000 shares of Preferred Stock (the “Preferred Stock”), of which 30,149,059 shares of Common Stock, 1,734,992 shares of Series C Preferred Stock, 760,000 shares of Series D Preferred Stock and 1,552,795 shares of Series E Preferred Stock were issued and outstanding. All outstanding shares of the Company’s capital stock have been duly authorized and validly issued, and are fully paid, non-assessable, and free of any pre-emptive rights, other than those certain preemptive rights set forth in the Series C Designation. Schedule B hereto sets forth a complete and accurate list of (a) the number, class and beneficial owners of the Preferred Stock as of the date hereof and (b) the reserve requirements of the Company with respect to shares of
3
Common Stock required to be reserved under all (w) outstanding Derivative Securities, (x) outstanding equity awards, (y) Company equity incentive plans and (z) the Warrants offered in connection with the Offering.
4.3.
Authorization and Enforcement. This Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights generally and to general principles of equity. The Company has full corporate power and authority necessary to enter into and deliver this Agreement and to perform its obligations hereunder.
4.4.
Reservation and Valid Issuance of Securities. Upon payment of the Purchase Price and issuance of the Units, (i) the Shares will be duly authorized, validly issued, fully paid, non-assessable and free of pre-emptive rights, (ii) the Warrant will be duly authorized, validly executed and delivered, and will constitute legal, valid and binding obligations of the Company, enforceable in accordance with its terms, and (iii) the Warrant Shares, when issued and paid for upon exercise of the Warrant in accordance with its terms, will be duly authorized, validly issued, fully paid, non-assessable and free of pre-emptive rights.
4.5.
Reservation of Warrant Shares. During the Exercise Period, the Company shall have reserved from its duly authorized capital stock the number of shares of Common Stock issuable upon exercise of the Warrant.
4.6.
No Conflict, Breach, Violation or Default; Third Party Consents. The execution, delivery and performance of this Agreement and the Warrant by the Company and the issuance and sale of the Units, including the Shares and the Warrant, and the issuance of the Warrant Shares upon exercise of the Warrant, will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under (i) the Company’s Amended and Restated Certificate of Incorporation, as amended, or the Company’s Bylaws, both as in effect on the date hereof (collectively, the “Company Documents”), (ii) any shareholder agreement or voting agreement to which any officer, director or holder of more than 5% of the Company’s securities is a party, (iii) any statute, rule, regulation or order of any governmental agency, self-regulatory agency, securities regulatory or insurance regulatory agency or body or any court, domestic or foreign, having jurisdiction over the Company or any of its assets or properties, or (iv) any material agreement or instrument to which the Company is a party or by which the Company is bound or to which any of its assets or properties is subject; except in the case of each of clauses (iii) and (iv), such as could not, individually or in the aggregate, have or reasonably be expected to result in a material adverse effect on the Company or its ability to perform its obligations hereunder. No approval of or filing with any governmental authority or other third-party entity or person is required for the Company to enter into, execute or perform this Agreement, the Warrant or any related transaction document.
4.7.
SEC Reports and Financial Statements.
4.7.1.
SEC Reports. The Company has made available to Purchaser through the SEC’s EDGAR system accurate and complete copies (excluding copies of exhibits) of
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each report, quarterly report, annual report, current report, registration statement, and definitive proxy statement or information statement filed by the Company with the United States Securities and Exchange Commission (“SEC”) since December 31, 2023 (collectively, the “SEC Reports”). All statements, reports, schedules, forms and other documents required to have been filed by the Company with the SEC have been so filed. To the Company’s Knowledge, as of the time it was filed with the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing): (i) each of the SEC Reports complied in all material respects with the applicable requirements of the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as applicable; and (ii) none of the SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
4.7.2.
Financial Statements. The financial statements contained in the SEC Reports: (i) complied as to form in all material respects with the published rules and regulations of the SEC applicable thereto at the time of filing and as of the date of the Closing; (ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered (except as may be indicated in the notes to such financial statements and, in the case of unaudited statements, as permitted by Form 10-Q of the SEC, and except that unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end audit adjustments which will not, individually or in the aggregate, be material in amount); and (iii) fairly present, in all material respects, the financial position of the Company as of the respective dates thereof and the results of operations of the Company for the periods covered thereby, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. All adjustments considered necessary for a fair presentation of the financial statements have been included.
4.7.3.
Securities Law Compliance. Assuming the accuracy of the representations and warranties of Purchaser and each other purchaser, set forth in Section 5 of this Agreement or such other purchasers’ applicable securities purchase agreement, the offer and sale of the Units (including the Shares and the Warrant) and the issuance of the Warrant Shares upon exercise of the Warrant will constitute an exempted transaction under the Securities Act, and registration of the Units, Shares, Warrant and Warrant Shares is not required. The Company shall make such filings as may be necessary to comply with the federal securities laws and the “blue sky” laws of any state in connection with the offer and sale of the Units and the issuance of the Warrant Shares, which filings will be made in a timely manner.
4.7.4.
For the purposes of this Agreement, “Company’s Knowledge” means the actual knowledge of the executive officers (as defined in Rule 405 under the Securities Act) of the Company.
4.8.
Compliance with Law; No Disqualification.
4.8.1.
OFAC. Neither the Company nor any of its affiliates or any of their respective directors, officers, employees or agents is a Person that is, or is owned or controlled by Persons that are: (A) the subject of any sanctions administered by the U.S. Department of Treasury’s Office of Foreign Assets Control or the U.S. Department of State, the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions
5
authority (collectively, “Sanctions”), or (B) located, organized or resident in a country or territory that is the subject of Sanctions. Neither the Company nor any of its affiliates has engaged in, or is now engaged in, directly or indirectly, any dealings or transactions with any Person, or in any country or territory, that, at the time of the dealing or transaction, is or was the subject of Sanctions.
4.8.2.
Foreign Corrupt Practices Act. Neither the Company nor any director, officer, or employee of the Company, or to the Company’s Knowledge, any other person associated with or acting on behalf of the Company, including, without limitation, any agent or affiliate of the Company has (a) used any corporate funds for any unlawful contribution, gift, entertainment, or other unlawful expense relating to political activity or to influence official action; (b) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (c) made any bribe, rebate, payoff, influence payment, kickback, or other unlawful payment; or (d) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder; and the Company has instituted and maintains policies and procedures designed to ensure compliance therewith.
4.8.3.
No Disqualification Events. With respect to the Units (including the Shares, Warrant and Warrant Shares), neither the Company, nor any of its predecessors, directors, executive officers, or any beneficial owner (as that term is defined in Rule 13d-3 under the Exchange Act) of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale of the Units (each, an “Company Covered Person” and, collectively, “Company Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. The Company has exercised reasonable care to determine (i) the identity of each person that is a Company Covered Person; and (ii) whether any Company Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e) under the Securities Act, and has furnished to Purchaser a copy of any disclosures provided thereunder.
4.9.
No Directed Selling Efforts or General Solicitation. Neither the Company nor any Person, as defined below, acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D promulgated under the Securities Act) in connection with the offer or sale of any of the Units (including the Shares and the Warrant). For purposes of this Agreement, “Person” means any individual, corporation, company, limited liability company, partnership, limited liability partnership, trust, estate, proprietorship, joint venture, association, organization or entity.
4.10.
Solvency. As of the date of this Agreement (assuming the closing of the Offering), the Company is solvent. For purposes of this Section 4.10, the Company shall be deemed to be solvent if (a) the fair value of its assets exceeds its total liabilities, and (b) the Company is able to pay its debts as they become due in the ordinary course of business.
5.
REPRESENTATIONS AND WARRANTIES OF PURCHASER.
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Purchaser hereby represents, warrants and covenants to the Company as follows:
5.1.
Legal Power. Purchaser has the requisite power and is authorized to enter into this Agreement, to purchase the Units hereunder, and to carry out and perform its obligations under the terms of this Agreement.
5.2.
Due Execution. This Agreement has been duly authorized, executed and delivered by Purchaser, and, upon due execution and delivery by the Company, this Agreement will be a valid and binding agreement of Purchaser.
5.3.
Access to Information. Purchaser understands that an investment in the Units involves a high degree of risk and long term or permanent illiquidity, including, risk of loss of their entire investment. Purchaser has been given full and complete access to the Company for the purpose of obtaining such information as Purchaser or its qualified representative has reasonably requested in connection with the decision to purchase the Units. Purchaser represents that Purchaser has received and reviewed copies of the SEC Reports. Purchaser represents that Purchaser has been afforded the opportunity to ask questions of the officers of the Company regarding its business prospects and the Units, all as Purchaser or Purchaser’s investor’s representatives have deemed necessary to make an informed investment decision to purchase the Units.
5.4.
Restricted Securities.
5.4.1.
Purchaser has been advised that none of the Units, including the Shares and the Warrant underlying the Units, or the Warrant Shares, have been registered under the Securities Act or any other applicable securities laws and that the Units are being offered and sold pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D thereunder, and that the Company’s reliance upon Section 4(a)(2) and/or Rule 506 of Regulation D is predicated in part on such Purchaser representations as contained herein. Purchaser acknowledges that the Shares, Warrant and Warrant Shares will be issued as “restricted securities” as defined by Rule 144 promulgated pursuant to the Securities Act. None of the Shares, Warrant or Warrant Shares may be resold in the absence of an effective registration thereof under the Securities Act and applicable state securities laws unless, in the opinion of counsel reasonably satisfactory to the Company, an applicable exemption from registration is available.
5.4.2.
Purchaser represents that Purchaser is acquiring the Units for Purchaser’s own account, and not as nominee or agent, for investment purposes only and not with a view to, or for sale in connection with, a distribution, as that term is used in Section 2(11) of the Securities Act, in a manner which would require registration under the Securities Act or any state securities laws.
5.4.3.
Purchaser understands and acknowledges that the certificates or book-entry statements representing the Shares and the Warrant will bear substantially the following legend:
“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE SOLD,
7
DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES OR (ii) THE SECURITIES ARE SOLD PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. NOTWITHSTANDING THE FOREGOING, NO NOTICE TO OR CONSENT OF THE COMPANY SHALL BE REQUIRED IN CONNECTION WITH ANY SUCH SALE OR TRANSFERS.”
5.4.4.
Purchaser acknowledges that an investment in the Units is not liquid and is transferable only under limited conditions. Purchaser acknowledges that the Shares, Warrant and Warrant Shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Purchaser is aware of the provisions of Rule 144 promulgated under the Securities Act, which permits limited resale of restricted securities subject to the satisfaction of certain conditions and that such Rule is not now available and, in the future, may not become available for resale of any of the Shares, Warrant or Warrant Shares.
5.5.
Accredited Investor; Sophistication and Ability to Bear Risk of Loss. Purchaser is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act as of the date hereof and at any time it exercises the Warrant. Purchaser has not been organized for the specific purpose of acquiring the Units. Purchaser acknowledges that it is able to protect its interests in connection with the acquisition of the Units and can bear the economic risk of investment in such securities without producing a material adverse change in Purchaser’s financial condition. Purchaser has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Units.
5.6.
No Advertising. Purchaser has not received any general solicitation or advertising regarding the offer of the Units.
5.7.
Public Statements. Purchaser agrees not to issue any public statement with respect to the offering of the Units, Purchaser’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law.
5.8.
Confidential. Purchaser acknowledges that the information made available to Purchaser other than the SEC Reports is confidential and non-public and agrees that all such information shall be kept in confidence by Purchaser and neither used by Purchaser for Purchaser’s own benefit (other than in connection with this subscription) nor disclosed to any third party for any reason; provided, however, that (a) Purchaser may disclose such information to its affiliates and advisors who may have a need for such information in connection with providing advice to Purchaser with respect to its investment in the Company so long as such affiliates and advisors have an obligation of confidentiality, (b) this obligation shall not apply to any such information that (i) is part of the public knowledge or literature and readily accessible at the date hereof, (ii) becomes part of the public knowledge or literature and readily accessible by publication (except as a result of a breach of this provision), (iii) is being disclosed pursuant to a subpoena or court order or is otherwise required to be provided by law, or (iv) is received from third parties without
8
an obligation of confidentiality (except third parties who disclose such information in violation of any confidentiality agreements or obligations, including, without limitation, any subscription or other similar agreement entered into with the Company) and (c) Purchaser may disclose such information as is necessary to enforce the terms of this Agreement.
5.9.
Exempt Offering. Purchaser understands that the Units are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of Purchaser in order to determine the availability of such exemptions and the eligibility of Purchaser to acquire the Units.
6.
CONDITIONS.
6.1.
Conditions Precedent to the Obligation of the Company to Close and to Sell the Units. The obligation hereunder of the Company to close and issue and sell the Units to Purchaser at the Closing is subject to the satisfaction or waiver, at or before such Closing of the conditions set forth below. These conditions are for the Company’s sole benefit and may be waived by the Company at any time in their sole discretion.
6.1.1.
Accuracy of Purchaser’s Representations and Warranties. The representations and warranties of Purchaser shall be true and correct in all material respects as of the date when made and as of the Closing as though made at that time, except for representations and warranties that are expressly made as of a particular date, which shall be true and correct in all material respects as of such date.
6.1.2.
Performance by Purchaser. Purchaser shall have performed, satisfied, and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by Purchaser at or prior to the Closing.
6.1.3.
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
6.1.4.
Delivery of Purchase Price. The Purchase Price for the Units shall be available in cleared funds and authorized by the Company and Purchaser, in their sole and absolute discretion, for distribution on the Closing in accordance with the terms hereof.
6.1.5.
Receipt of Waivers. The Company shall have received the necessary Preemptive Rights Waiver and Share Reservation Waivers.
6.1.6.
Voting Agreements. The Company and each of Golden Post Rail, LLC, Ocean Partners UK Limited, and Gareth Nichol shall have entered into voting agreements (the “Voting Agreements”) pursuant to which such stockholders shall have agreed to vote all of their shares entitled to vote at the Stockholder Meeting in favor of the Amendment, in accordance with and subject to the terms and conditions of the Voting Agreements.
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6.2.
Conditions Precedent to the Obligation of Purchaser to Close and to Purchase the Units. The obligation hereunder of Purchaser to purchase the Units and consummate the transactions contemplated by this Agreement is subject to the satisfaction or waiver, at or before the Closing, of each of the conditions set forth below. These conditions are for Purchaser’s sole benefit and may be waived by Purchaser at any time in its sole discretion.
6.2.1.
Accuracy of the Company’s Representations and Warranties. Each of the representations and warranties of the Company in this Agreement shall be true and correct in all material respects as of the Closing, except for representations and warranties that speak as of a particular date, which shall be true and correct in all material respects as of such date.
6.2.2.
Performance by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing.
6.2.3.
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
6.2.4.
No Proceedings or Litigation. No action, suit or proceeding before any arbitrator or any governmental authority shall have been commenced, and no investigation by any governmental authority shall have been initiated, against the Company, or any of the officers, directors or affiliates of the Company seeking to restrain, prevent or change the transactions contemplated by this Agreement, or seeking damages in connection with such transactions.
6.2.5.
Units. At the Closing, the Company shall have delivered to Purchaser evidence of delivery of the Shares along with all appropriate board resolutions or other necessary documentation. The Company shall also deliver this Agreement and the Warrant, duly executed by the Company.
6.2.6.
Receipt of Waivers. The Company shall have received the necessary Preemptive Rights Waiver and Share Reservation Waivers.
6.2.7.
Voting Agreements. The Company and each of Golden Post Rail, LLC, Ocean Partners UK Limited, and Gareth Nichol shall have entered into the Voting Agreements.
7.
COVENANTS AND AGREEMENTS
7.1.
Use of Proceeds. The Company will use the net proceeds from the sale of the Units for a repayment of a portion of the credit facility provided to the Company, and for general corporate and working capital purposes. The Company agrees that, without the prior written consent of Purchaser, the Company will not use any such proceeds (i) to redeem, repurchase or otherwise acquire, or to make any distributions in respect of, any of the Company’s securities, (ii) to repay or otherwise satisfy any indebtedness of the Company (other than the aforementioned credit facility), or (iii) for any personal, family, or household purpose.
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7.2.
Satisfaction of Authorized Shares Condition. The Company covenants as follows with respect to the Authorized Shares Condition:
7.2.1.
Preliminary Proxy Statement. The Company shall prepare and file with the SEC a preliminary proxy statement (or preliminary information statement, if applicable) relating to the Authorized Shares Condition (the “Proxy Statement”) no later than thirty (30) days following the date of this Agreement. The Proxy Statement shall comply in all material respects with all applicable requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder.
7.2.2.
Definitive Proxy Statement. (A) If the SEC does not provide any comments on the Proxy Statement within the ten (10) day period following the filing of the preliminary Proxy Statement, the Company shall file the definitive Proxy Statement with the SEC promptly following the expiration of such ten (10) day period. (B) If the SEC provides comments on the Proxy Statement, the Company shall (i) respond to all such comments as promptly as practicable and use its reasonable best efforts to resolve all such comments with the SEC, and (ii) file the definitive Proxy Statement with the SEC within two (2) Business Days following the date on which the SEC confirms that it has no further comments on the Proxy Statement or otherwise clears the Proxy Statement for mailing. The Company shall promptly notify Purchaser of the receipt of any comments from the SEC on the Proxy Statement and shall provide Purchaser with copies of all correspondence between the Company and the SEC relating to the Proxy Statement.
7.2.3.
Stockholder Meeting. The Company shall duly call, give notice of, convene and hold a meeting of its stockholders (the “Stockholder Meeting”) for the purpose of obtaining stockholder approval of the Amendment and satisfaction of the Authorized Shares Condition no later than sixty (60) days following the date of filing of the definitive Proxy Statement. The Company shall use its reasonable best efforts to solicit proxies in favor of the Amendment and shall include in the Proxy Statement the recommendation of the Board of Directors that stockholders vote in favor of the Amendment. If on the date of the Stockholder Meeting, or a date preceding the date on which the Stockholder Meeting is scheduled, the Company reasonably believes that (i) it will not receive proxies sufficient to obtain stockholder approval of the Amendment, whether or not a quorum would be present, or (ii) it will not have a quorum, then the Company may adjourn or postpone the Stockholder Meeting; provided, however, that any such adjournment or postponement shall not extend beyond ninety (90) days following the date of this Agreement without the prior written consent of Purchaser.
7.2.4.
Filing of Amendment. Promptly following receipt of the requisite stockholder approval of the Amendment at the Stockholder Meeting, the Company shall file the Amendment with the Delaware Secretary of State and provide evidence of such filing to Purchaser.
7.2.5.
Reasonable Best Efforts. The Company shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to satisfy the Authorized Shares Condition as promptly as practicable; provided that the Company shall not be in default under this Agreement or the Warrant to the extent it exercises reasonable diligence in seeking to satisfy the Authorized Shares Condition; and provided, further, that in no event will the Company be in default under this Agreement or the Warrant if any failure of the Authorized Shares Condition results from the acts or omissions of Purchaser or
11
any other purchaser of the Units (i.e., failure of such purchaser to vote all of its shares entitled to vote on the Authorized Shares Increase in favor of the Authorized Shares Increase).
7.3.
Most Favored Nations. Other than other securities purchase agreements containing the same terms as this Agreement (other than the number of Units purchased), the Company has not entered into any side letter or similar agreement with any other subscriber, investor or potential investor in connection with such other subscriber’s, investor’s or potential investor’s direct or indirect investment in the Company or participation in the Offering. The Company represents, warrants, and covenants that it has not offered, and will not offer, to any other stockholder participating in the Offering any terms or conditions that are more favorable than those set forth in this Agreement. If, at any time on or after the date hereof, the Company offers or grants to any other stockholder participating in the Offering any rights, terms, or conditions that are more favorable than those provided to Purchaser under this Agreement (including, without limitation, with respect to the Purchase Price of the Units, warrant coverage, exercise price of the Warrant, anti-dilution protections, registration rights, information rights, board observation or participation rights, or any other economic or governance terms), then (a) the Company shall provide Purchaser with prompt written notice of such more favorable terms, and (b) such more favorable terms shall automatically and without further action by Purchaser be deemed to apply to Purchaser and this Agreement (and any related transaction documents) shall be deemed amended to incorporate such more favorable terms, effective as of the date such terms were first offered or granted to such other stockholder. If, at any time on or after the date hereof, the Company offers or grants to any other stockholder participating in the Offering any rights, terms, or conditions that are more favorable than those provided to Purchaser under this Agreement, then the Company shall promptly prepare an amendment to this Agreement, such that such more favorable terms shall be memorialized in the amendment and become binding upon the Company to the benefit of Purchaser.
7.4.
Standstill on Securities Issuances.
7.4.1.
From the date of this Agreement until such time as the Amendment has been duly filed with the Delaware Secretary of State (the “Standstill Period”), the Company shall not, without the prior written consent of Purchaser, directly or indirectly, issue, sell, grant or otherwise dispose of, or agree or commit to issue, sell, grant or otherwise dispose of, any shares of Common Stock, Preferred Stock, or any other equity securities of the Company, or any securities convertible into, exchangeable for, or exercisable for equity securities of the Company, or any options, warrants, or other rights to acquire any such equity securities.
7.4.2.
Notwithstanding the foregoing, the restrictions set forth in Section 7.4(i) shall not apply to: (A) the issuance of Units, Shares and Warrants pursuant to and in accordance with the terms of this Agreement and the Offering; and (B) other than those securities that are the subject of the Share Reservation Waivers, the issuance of shares of Common Stock upon the exercise or conversion of Derivative Securities outstanding as of the date hereof, in accordance with the terms of such Derivative Securities as in effect on the date hereof.
7.4.3.
The Company shall provide Purchaser with prompt written notice of the filing of the Amendment with the Delaware Secretary of State, together with evidence of such
12
filing, and upon such filing, the Standstill Period shall automatically terminate without further action by either party.
8.
MISCELLANEOUS.
8.1.
Governing Law. The validity and interpretation of this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. Each of the parties hereto and their assigns hereby consents to the exclusive jurisdiction and venue of the Courts of the State of Delaware, and the United States District Court for the State of Delaware with respect to any matter relating to this Agreement and performance of the parties’ obligations hereunder, the documents and instruments executed and delivered concurrently herewith or pursuant hereto and performance of the parties’ obligations thereunder and each of the parties hereto hereby consents to the personal jurisdiction of such courts and shall subject itself to such personal jurisdiction. Any action, suit or proceeding relating to such matters shall be commenced, pursued, defended and resolved only in such courts and any appropriate appellate court having jurisdiction to hear an appeal from any judgment entered in such courts. The parties irrevocably waive the defense of an inconvenient forum to the maintenance of such suit or proceeding. Service of process in any action, suit or proceeding relating to such matters may be made and served within or outside the State of Delaware by registered or certified mail to the parties and their representatives at their respective addresses specified in Section 8.6, providedthat a reasonable time, not less than thirty (30) days, is allowed for response. Service of process may also be made in such other manner as may be permissible under the applicable court rules. THE PARTIES HERETO WAIVE TRIAL BY JURY.
8.2.
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, executors, and administrators of the parties hereto.
8.3.
Entire Agreement. This Agreement and the exhibits and schedules attached hereto, and the other documents, including the Preemptive Rights Waiver and Share Reservation Waivers, delivered pursuant hereto and thereto, constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants, or agreements except as specifically set forth herein or therein. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto and their respective successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided herein.
8.4.
Severability. In case any provision of this Agreement shall be invalid, illegal, or unenforceable, it shall to the extent practicable, be modified so as to make it valid, legal and enforceable and to retain as nearly as practicable the intent of the parties, and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
8.5.
Amendment and Waiver. Except as otherwise provided herein, any term of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively, and either for a
13
specified period of time or indefinitely), with the written consent of the Company and Purchaser. Any amendment or waiver effected in accordance with this Section 8.5 shall be binding upon each future holder of any security purchased under this Agreement and the Company.
8.6.
Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be effective when delivered personally, or sent by facsimile and in each case with a confirming email (with receipt confirmed), provided that a copy is mailed by registered mail, return receipt requested, or when received by the addressee, if sent by Express Mail, Federal Express or other express delivery service (receipt requested) in each case to the appropriate address set forth below:
If to the Company: DynaResource, Inc.
The Urban Towers of Las Colinas
222 W. Las Colinas Blvd.
Suite 1910 North Tower
Las Colinas / Irving, TX 75039
Email: rhazelton@dynaresource.com
Attention: Rohan Hazelton
If to Purchaser: Smith First Family L.P.
1541 East Interstate 30, Suite 130
Rockwall, TX 75087
Email: charlie@ck2advisors.com
Attention: Charlie Smith
8.7.
Faxes, Electronic Mail and Counterparts. This Agreement may be executed in one or more counterparts. Delivery of an executed counterpart of the Agreement or any exhibit attached hereto by facsimile transmission or electronic mail (any such delivery, an “Electronic Delivery”), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto, each other party hereto shall re-execute original forms hereof and deliver them in person to all other parties. No party hereto shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense relates to lack of authenticity.
8.8.
Expenses. Except as specifically provided herein, each party shall bear its own costs and expenses, including legal and accounting fees, in connection with this Agreement and the transactions contemplated hereunder.
8.9.
Titles and Subtitles. The titles of the paragraphs and subparagraphs of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
8.10.
Further Assurances. At any time and from time to time after the Closing, upon reasonable request of the other, each party shall do, execute, acknowledge and deliver such
14
further acts, assignments, transfers, conveyances and assurances as may be reasonably required for the more complete consummation of the transactions contemplated herein.
[Signatures on following page]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.
DYNARESOURCE, INC.
By: /s/ Rohan Hazelton
Name: Rohan Hazelton
Title: Chief Executive Officer
SMITH FIRST FAMILY L.P.
By: /s/ Charlie Smith
Name: Charlie Smith
Title: General Partner
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EXHIBIT A
Form of Warrant
[see attached]
[Form of Warrant]
SCHEDULE A
Derivative Securities
Name of Holder |
Title of Derivative Securities |
No. of Derivative Securities |
Golden Post Rail, LLC |
Series C Preferred Stock |
1,734,992 |
Golden Post Rail, LLC |
Series E Preferred Stock |
1,552,795 |
Golden Post Rail, LLC |
Series D Warrants |
783,976 |
Gareth Nichol |
Series D Preferred Stock |
500,000 |
Ronald Vail |
Series D Preferred Stock |
100,000 |
Dale Petrini |
Series D Preferred Stock |
50,000 |
Rohan Hazelton |
Options |
750,000 |
Quinton Hennigh |
Options |
400,000 |
[Schedule A]
SCHEDULE B
Capitalization
Preferred Stockholders
Name of Holder |
Class of Preferred Stock |
No. of Shares |
Golden Post Rail, LLC |
Series C |
1,734,992 |
Gareth Nichol |
Series D |
500,000 |
Ronald Vail |
Series D |
100,000 |
Dale Petrini |
Series D |
50,000 |
Thomas R. Tillander |
Series D |
35,000 |
Ralph C. Whalen |
Series D |
25,000 |
Paul Menegay |
Series D |
12,500 |
Jane Menegay |
Series D |
12,500 |
Duane Menegay |
Series D |
12,500 |
Paul Mark Woods |
Series D |
12,500 |
Golden Post Rail, LLC |
Series E |
1,552,795 |
Reserve Requirements
Category |
Reserve Requirements |
Derivative Securities (Series C, D, and E Preferred Stock and Series D Warrants) |
10,450,184 |
Outstanding Equity Awards |
3,592,142 |
Equity Incentive Plans (exclusive of Outstanding Equity Awards) |
1,020,358 |
Warrants (Current Offering) |
6,666,666 |
[Schedule B]
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is made as of September 1, 2026, by and between DYNARESOURCE, INC., a Delaware corporation (the “Company”), and DOUG METCALF, an individual (“Purchaser”).
RECITALS
A.
The Company intends to issue and sell up to 6,666,666 units, each unit consisting of one share of its common stock, par value $0.01 per share (“Common Stock”), and one warrant to purchase one share of Common Stock at an exercise price of $0.51 per share in a private offering with certain existing stockholders of the Company on the terms set forth below (the “Offering”).
B.
In connection with the Offering, certain existing stockholders of the Company have agreed to, on a one-time basis and for a period of up to 120 days, (i) waive all share reservation obligations of the Company under any and all certificates, instruments, plans and/or agreements corresponding to the securities listed on Schedule Ahereto (the “Derivative Securities”), and (ii) not exercise or convert any Derivative Securities until such time as the Company files an amendment to its Amended and Restated Certificate of Incorporation, as amended, to either increase its number of authorized shares of Common Stock or effect a reverse stock split of the Common Stock, in each case to satisfy all share reservation obligations of the Company (the “Amendment”).
C.
As part of the Offering, the Board of Directors of the Company (the “Board of Directors”) has authorized the issuance to Purchaser for the aggregate purchase price set forth below (the “Purchase Price”), units (the “Units”), with each Unit consisting of (i) one share of Common Stock (such shares of Common Stock included in the Units, the “Shares”), and (ii) a warrant to purchase one share of Common Stock at an exercise price of $0.51 per share (the “Warrant,” and such shares of Common Stock issuable upon exercise of the Warrant, the “Warrant Shares”), each such Unit being sold at a purchase price of $0.45 per Unit.
D.
Purchaser wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, the Units.
NOW, THEREFORE, in consideration of the foregoing premises and in reliance on the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which the parties hereby acknowledge, it is agreed as follows:
1.
DEFINITIONS.
1.1.
“Authorized Shares Increase” means an increase of the authorized shares of Common Stock or reverse stock split to accommodate the exercise of the Warrant to purchase
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the Warrant Shares in accordance with the terms of the Warrant (taking into account all issued and outstanding shares of Common Stock and all shares of Common Stock required to be reserved under all (a) outstanding Derivative Securities, (b) outstanding equity awards, and (c) Company equity incentive plans).
1.2.
“Authorized Shares Condition” means the approval by the requisite stockholders of the Company at a duly called meeting or by written consent of the Amendment and the filing of such Amendment with the Delaware Secretary of State.
1.3.
“Business Day” means any day other than a Saturday, Sunday, or any day on which banking institutions in the State of Texas are authorized or required by law, regulation, or executive order to close.
1.4.
“Series C Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series C Senior Convertible Preferred Stock, as amended.
1.5.
“Series D Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series D Convertible Preferred Stock, as amended.
1.6.
“Series E Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series E Convertible Preferred Stock, as amended.
1.7.
“Preemptive Rights Waiver” means the waiver by the Series C preferred stockholder of its preemptive rights and other anti-dilution protections under the Series C Designation in connection with the Offering.
1.8.
“Share Reservation Waivers” means (a) the waiver by the Series C and Series E preferred stockholder of the Company’s share reservation requirements under the Series C Designation and the Series E Designation, respectively; (b) the waiver by at least 85% of the Series D preferred stockholders of the Company’s share reservation requirements under the Series D Designation with respect to their Series D preferred stock; (c) the waiver by at least 88% of the Company’s existing warrant holders of the Company’s share reservation requirements under their outstanding warrants; (d) the waiver by all of the Company’s existing option holders of the Company’s share reservation requirements under their respective options; and (e) the agreement of each of the waiving Series C, D, and E preferred stockholders, warrant holders, and option holders not to convert or exercise, as applicable, any of their respective outstanding convertible preferred stock, warrants, and/or options, in each case, until after the Authorized Shares Condition is satisfied, subject to any other conditions set forth in such waivers.
2.
PURCHASE AND SALE OF UNITS.
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2.1.
Purchase and Sale. In reliance upon the representations and warranties of the Company and Purchaser contained herein and subject to the terms and conditions set forth herein, at the Closing (as defined below), Purchaser shall purchase, and the Company shall sell and issue to Purchaser, 150,000 Units for an aggregate Purchase Price of $67,500.00 (based on a purchase price of $0.45 per Unit), which Purchase Price was delivered by Purchaser to the Company by wire transfer of good funds to the account specified by the Company in advance of signing this Agreement.
2.2.
Issuance of Warrant. The Warrant shall be in the form attached hereto as Exhibit A and shall be exercisable for a period commencing on the date the Authorized Shares Condition is satisfied and ending at 5:00 p.m., Central time, on the later of (a) 180 days following the issuance date of the Warrant, and (b) 30 days following the satisfaction of the Authorized Shares Condition (the “Exercise Period”) at an exercise price of $0.51 per Warrant Share, subject to adjustment as provided therein.
3.
CLOSING.
3.1.
Date and Time. The sale of Units will take place at a closing (the “Closing”) at the offices of the Company or at such other place (or remotely) as the Company and Purchaser shall agree in writing concurrent with the execution of this Agreement.
4.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
As a material inducement to Purchaser to enter into this Agreement and to purchase the Units, the Company represents and warrants that the following statements are true and correct in all material respects as of the date hereof and will be true and correct in all material respects at Closing, except as expressly qualified or modified herein.
4.1.
Organization and Good Standing. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has full corporate power and authority to enter into and perform its obligations under this Agreement, and to own its properties and to carry on its business in all jurisdictions as presently conducted and as proposed to be conducted. The Company and its subsidiaries have all governmental and other licenses and permits and authorizations to do business in all jurisdictions where their activities require such licenses, permits and authorizations, except where failure to obtain any such license, permit or authorization will not have a material adverse effect on the Company’s business.
4.2.
Capitalization. As of immediately prior to the Closing, the Company was authorized to issue 60,001,000 shares of capital stock, consisting of 40,000,000 shares of Common Stock and 20,001,000 shares of Preferred Stock (the “Preferred Stock”), of which 30,149,059 shares of Common Stock, 1,734,992 shares of Series C Preferred Stock, 760,000 shares of Series D Preferred Stock and 1,552,795 shares of Series E Preferred Stock were issued and outstanding. All outstanding shares of the Company’s capital stock have been duly authorized and validly issued, and are fully paid, non-assessable, and free of any pre-emptive rights, other than those certain preemptive rights set forth in the Series C Designation. Schedule B hereto sets forth a complete and accurate list of (a) the number, class and beneficial owners of the Preferred Stock as of the date hereof and (b) the reserve requirements of the Company with respect to shares of
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Common Stock required to be reserved under all (w) outstanding Derivative Securities, (x) outstanding equity awards, (y) Company equity incentive plans and (z) the Warrants offered in connection with the Offering.
4.3.
Authorization and Enforcement. This Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights generally and to general principles of equity. The Company has full corporate power and authority necessary to enter into and deliver this Agreement and to perform its obligations hereunder.
4.4.
Reservation and Valid Issuance of Securities. Upon payment of the Purchase Price and issuance of the Units, (i) the Shares will be duly authorized, validly issued, fully paid, non-assessable and free of pre-emptive rights, (ii) the Warrant will be duly authorized, validly executed and delivered, and will constitute legal, valid and binding obligations of the Company, enforceable in accordance with its terms, and (iii) the Warrant Shares, when issued and paid for upon exercise of the Warrant in accordance with its terms, will be duly authorized, validly issued, fully paid, non-assessable and free of pre-emptive rights.
4.5.
Reservation of Warrant Shares. During the Exercise Period, the Company shall have reserved from its duly authorized capital stock the number of shares of Common Stock issuable upon exercise of the Warrant.
4.6.
No Conflict, Breach, Violation or Default; Third Party Consents. The execution, delivery and performance of this Agreement and the Warrant by the Company and the issuance and sale of the Units, including the Shares and the Warrant, and the issuance of the Warrant Shares upon exercise of the Warrant, will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under (i) the Company’s Amended and Restated Certificate of Incorporation, as amended, or the Company’s Bylaws, both as in effect on the date hereof (collectively, the “Company Documents”), (ii) any shareholder agreement or voting agreement to which any officer, director or holder of more than 5% of the Company’s securities is a party, (iii) any statute, rule, regulation or order of any governmental agency, self-regulatory agency, securities regulatory or insurance regulatory agency or body or any court, domestic or foreign, having jurisdiction over the Company or any of its assets or properties, or (iv) any material agreement or instrument to which the Company is a party or by which the Company is bound or to which any of its assets or properties is subject; except in the case of each of clauses (iii) and (iv), such as could not, individually or in the aggregate, have or reasonably be expected to result in a material adverse effect on the Company or its ability to perform its obligations hereunder. No approval of or filing with any governmental authority or other third-party entity or person is required for the Company to enter into, execute or perform this Agreement, the Warrant or any related transaction document.
4.7.
SEC Reports and Financial Statements.
4.7.1.
SEC Reports. The Company has made available to Purchaser through the SEC’s EDGAR system accurate and complete copies (excluding copies of exhibits) of
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each report, quarterly report, annual report, current report, registration statement, and definitive proxy statement or information statement filed by the Company with the United States Securities and Exchange Commission (“SEC”) since December 31, 2023 (collectively, the “SEC Reports”). All statements, reports, schedules, forms and other documents required to have been filed by the Company with the SEC have been so filed. To the Company’s Knowledge, as of the time it was filed with the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing): (i) each of the SEC Reports complied in all material respects with the applicable requirements of the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as applicable; and (ii) none of the SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
4.7.2.
Financial Statements. The financial statements contained in the SEC Reports: (i) complied as to form in all material respects with the published rules and regulations of the SEC applicable thereto at the time of filing and as of the date of the Closing; (ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered (except as may be indicated in the notes to such financial statements and, in the case of unaudited statements, as permitted by Form 10-Q of the SEC, and except that unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end audit adjustments which will not, individually or in the aggregate, be material in amount); and (iii) fairly present, in all material respects, the financial position of the Company as of the respective dates thereof and the results of operations of the Company for the periods covered thereby, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. All adjustments considered necessary for a fair presentation of the financial statements have been included.
4.7.3.
Securities Law Compliance. Assuming the accuracy of the representations and warranties of Purchaser and each other purchaser, set forth in Section 5 of this Agreement or such other purchasers’ applicable securities purchase agreement, the offer and sale of the Units (including the Shares and the Warrant) and the issuance of the Warrant Shares upon exercise of the Warrant will constitute an exempted transaction under the Securities Act, and registration of the Units, Shares, Warrant and Warrant Shares is not required. The Company shall make such filings as may be necessary to comply with the federal securities laws and the “blue sky” laws of any state in connection with the offer and sale of the Units and the issuance of the Warrant Shares, which filings will be made in a timely manner.
4.7.4.
For the purposes of this Agreement, “Company’s Knowledge” means the actual knowledge of the executive officers (as defined in Rule 405 under the Securities Act) of the Company.
4.8.
Compliance with Law; No Disqualification.
4.8.1.
OFAC. Neither the Company nor any of its affiliates or any of their respective directors, officers, employees or agents is a Person that is, or is owned or controlled by Persons that are: (A) the subject of any sanctions administered by the U.S. Department of Treasury’s Office of Foreign Assets Control or the U.S. Department of State, the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions
5
authority (collectively, “Sanctions”), or (B) located, organized or resident in a country or territory that is the subject of Sanctions. Neither the Company nor any of its affiliates has engaged in, or is now engaged in, directly or indirectly, any dealings or transactions with any Person, or in any country or territory, that, at the time of the dealing or transaction, is or was the subject of Sanctions.
4.8.2.
Foreign Corrupt Practices Act. Neither the Company nor any director, officer, or employee of the Company, or to the Company’s Knowledge, any other person associated with or acting on behalf of the Company, including, without limitation, any agent or affiliate of the Company has (a) used any corporate funds for any unlawful contribution, gift, entertainment, or other unlawful expense relating to political activity or to influence official action; (b) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (c) made any bribe, rebate, payoff, influence payment, kickback, or other unlawful payment; or (d) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder; and the Company has instituted and maintains policies and procedures designed to ensure compliance therewith.
4.8.3.
No Disqualification Events. With respect to the Units (including the Shares, Warrant and Warrant Shares), neither the Company, nor any of its predecessors, directors, executive officers, or any beneficial owner (as that term is defined in Rule 13d-3 under the Exchange Act) of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale of the Units (each, an “Company Covered Person” and, collectively, “Company Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. The Company has exercised reasonable care to determine (i) the identity of each person that is a Company Covered Person; and (ii) whether any Company Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e) under the Securities Act, and has furnished to Purchaser a copy of any disclosures provided thereunder.
4.9.
No Directed Selling Efforts or General Solicitation. Neither the Company nor any Person, as defined below, acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D promulgated under the Securities Act) in connection with the offer or sale of any of the Units (including the Shares and the Warrant). For purposes of this Agreement, “Person” means any individual, corporation, company, limited liability company, partnership, limited liability partnership, trust, estate, proprietorship, joint venture, association, organization or entity.
4.10.
Solvency. As of the date of this Agreement (assuming the closing of the Offering), the Company is solvent. For purposes of this Section 4.10, the Company shall be deemed to be solvent if (a) the fair value of its assets exceeds its total liabilities, and (b) the Company is able to pay its debts as they become due in the ordinary course of business.
5.
REPRESENTATIONS AND WARRANTIES OF PURCHASER.
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Purchaser hereby represents, warrants and covenants to the Company as follows:
5.1.
Legal Power. Purchaser has the requisite power and is authorized to enter into this Agreement, to purchase the Units hereunder, and to carry out and perform his obligations under the terms of this Agreement.
5.2.
Due Execution. This Agreement has been duly authorized, executed and delivered by Purchaser, and, upon due execution and delivery by the Company, this Agreement will be a valid and binding agreement of Purchaser.
5.3.
Access to Information. Purchaser understands that an investment in the Units involves a high degree of risk and long term or permanent illiquidity, including, risk of loss of their entire investment. Purchaser has been given full and complete access to the Company for the purpose of obtaining such information as Purchaser or his qualified representative has reasonably requested in connection with the decision to purchase the Units. Purchaser represents that Purchaser has received and reviewed copies of the SEC Reports. Purchaser represents that Purchaser has been afforded the opportunity to ask questions of the officers of the Company regarding its business prospects and the Units, all as Purchaser or Purchaser’s investor’s representatives have deemed necessary to make an informed investment decision to purchase the Units.
5.4.
Restricted Securities.
5.4.1.
Purchaser has been advised that none of the Units, including the Shares and the Warrant underlying the Units, or the Warrant Shares, have been registered under the Securities Act or any other applicable securities laws and that the Units are being offered and sold pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D thereunder, and that the Company’s reliance upon Section 4(a)(2) and/or Rule 506 of Regulation D is predicated in part on such Purchaser representations as contained herein. Purchaser acknowledges that the Shares, Warrant and Warrant Shares will be issued as “restricted securities” as defined by Rule 144 promulgated pursuant to the Securities Act. None of the Shares, Warrant or Warrant Shares may be resold in the absence of an effective registration thereof under the Securities Act and applicable state securities laws unless, in the opinion of counsel reasonably satisfactory to the Company, an applicable exemption from registration is available.
5.4.2.
Purchaser represents that Purchaser is acquiring the Units for Purchaser’s own account, and not as nominee or agent, for investment purposes only and not with a view to, or for sale in connection with, a distribution, as that term is used in Section 2(11) of the Securities Act, in a manner which would require registration under the Securities Act or any state securities laws.
5.4.3.
Purchaser understands and acknowledges that the certificates or book-entry statements representing the Shares and the Warrant will bear substantially the following legend:
“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE SOLD,
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DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES OR (ii) THE SECURITIES ARE SOLD PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. NOTWITHSTANDING THE FOREGOING, NO NOTICE TO OR CONSENT OF THE COMPANY SHALL BE REQUIRED IN CONNECTION WITH ANY SUCH SALE OR TRANSFERS.”
5.4.4.
Purchaser acknowledges that an investment in the Units is not liquid and is transferable only under limited conditions. Purchaser acknowledges that the Shares, Warrant and Warrant Shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Purchaser is aware of the provisions of Rule 144 promulgated under the Securities Act, which permits limited resale of restricted securities subject to the satisfaction of certain conditions and that such Rule is not now available and, in the future, may not become available for resale of any of the Shares, Warrant or Warrant Shares.
5.5.
Accredited Investor; Sophistication and Ability to Bear Risk of Loss. Purchaser is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act as of the date hereof and at any time he exercises the Warrant. Purchaser acknowledges that he is able to protect his interests in connection with the acquisition of the Units and can bear the economic risk of investment in such securities without producing a material adverse change in Purchaser’s financial condition. Purchaser has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of an investment in the Units.
5.6.
No Advertising. Purchaser has not received any general solicitation or advertising regarding the offer of the Units.
5.7.
Public Statements. Purchaser agrees not to issue any public statement with respect to the offering of the Units, Purchaser’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law.
5.8.
Confidential. Purchaser acknowledges that the information made available to Purchaser other than the SEC Reports is confidential and non-public and agrees that all such information shall be kept in confidence by Purchaser and neither used by Purchaser for Purchaser’s own benefit (other than in connection with this subscription) nor disclosed to any third party for any reason; provided, however, that (a) Purchaser may disclose such information to his affiliates and advisors who may have a need for such information in connection with providing advice to Purchaser with respect to its investment in the Company so long as such affiliates and advisors have an obligation of confidentiality, (b) this obligation shall not apply to any such information that (i) is part of the public knowledge or literature and readily accessible at the date hereof, (ii) becomes part of the public knowledge or literature and readily accessible by publication (except as a result of a breach of this provision), (iii) is being disclosed pursuant to a subpoena or court order or is otherwise required to be provided by law, or (iv) is received from third parties without an obligation of confidentiality (except third parties who disclose such information in violation of
8
any confidentiality agreements or obligations, including, without limitation, any subscription or other similar agreement entered into with the Company) and (c) Purchaser may disclose such information as is necessary to enforce the terms of this Agreement.
5.9.
Exempt Offering. Purchaser understands that the Units are being offered and sold to him in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of Purchaser in order to determine the availability of such exemptions and the eligibility of Purchaser to acquire the Units.
6.
CONDITIONS.
6.1.
Conditions Precedent to the Obligation of the Company to Close and to Sell the Units. The obligation hereunder of the Company to close and issue and sell the Units to Purchaser at the Closing is subject to the satisfaction or waiver, at or before such Closing of the conditions set forth below. These conditions are for the Company’s sole benefit and may be waived by the Company at any time in their sole discretion.
6.1.1.
Accuracy of Purchaser’s Representations and Warranties. The representations and warranties of Purchaser shall be true and correct in all material respects as of the date when made and as of the Closing as though made at that time, except for representations and warranties that are expressly made as of a particular date, which shall be true and correct in all material respects as of such date.
6.1.2.
Performance by Purchaser. Purchaser shall have performed, satisfied, and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by Purchaser at or prior to the Closing.
6.1.3.
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
6.1.4.
Delivery of Purchase Price. The Purchase Price for the Units shall be available in cleared funds and authorized by the Company and Purchaser, in their sole and absolute discretion, for distribution on the Closing in accordance with the terms hereof.
6.1.5.
Receipt of Waivers. The Company shall have received the necessary Preemptive Rights Waiver and Share Reservation Waivers.
6.1.6.
Voting Agreements. The Company and each of Golden Post Rail, LLC, Ocean Partners UK Limited, and Gareth Nichol shall have entered into voting agreements (the “Voting Agreements”) pursuant to which such stockholders shall have agreed to vote all of their shares entitled to vote at the Stockholder Meeting in favor of the Amendment, in accordance with and subject to the terms and conditions of the Voting Agreements.
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6.2.
Conditions Precedent to the Obligation of Purchaser to Close and to Purchase the Units. The obligation hereunder of Purchaser to purchase the Units and consummate the transactions contemplated by this Agreement is subject to the satisfaction or waiver, at or before the Closing, of each of the conditions set forth below. These conditions are for Purchaser’s sole benefit and may be waived by Purchaser at any time in his sole discretion.
6.2.1.
Accuracy of the Company’s Representations and Warranties. Each of the representations and warranties of the Company in this Agreement shall be true and correct in all material respects as of the Closing, except for representations and warranties that speak as of a particular date, which shall be true and correct in all material respects as of such date.
6.2.2.
Performance by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing.
6.2.3.
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
6.2.4.
No Proceedings or Litigation. No action, suit or proceeding before any arbitrator or any governmental authority shall have been commenced, and no investigation by any governmental authority shall have been initiated, against the Company, or any of the officers, directors or affiliates of the Company seeking to restrain, prevent or change the transactions contemplated by this Agreement, or seeking damages in connection with such transactions.
6.2.5.
Units. At the Closing, the Company shall have delivered to Purchaser evidence of delivery of the Shares along with all appropriate board resolutions or other necessary documentation. The Company shall also deliver this Agreement and the Warrant, duly executed by the Company.
6.2.6.
Receipt of Waivers. The Company shall have received the necessary Preemptive Rights Waiver and Share Reservation Waivers.
6.2.7.
Voting Agreements. The Company and each of Golden Post Rail, LLC, Ocean Partners UK Limited, and Gareth Nichol shall have entered into the Voting Agreements.
7.
COVENANTS AND AGREEMENTS
7.1.
Use of Proceeds. The Company will use the net proceeds from the sale of the Units for a repayment of a portion of the credit facility provided to the Company, and for general corporate and working capital purposes. The Company agrees that, without the prior written consent of Purchaser, the Company will not use any such proceeds (i) to redeem, repurchase or otherwise acquire, or to make any distributions in respect of, any of the Company’s securities, (ii) to repay or otherwise satisfy any indebtedness of the Company (other than the aforementioned credit facility), or (iii) for any personal, family, or household purpose.
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7.2.
Satisfaction of Authorized Shares Condition. The Company covenants as follows with respect to the Authorized Shares Condition:
7.2.1.
Preliminary Proxy Statement. The Company shall prepare and file with the SEC a preliminary proxy statement (or preliminary information statement, if applicable) relating to the Authorized Shares Condition (the “Proxy Statement”) no later than thirty (30) days following the date of this Agreement. The Proxy Statement shall comply in all material respects with all applicable requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder.
7.2.2.
Definitive Proxy Statement. (A) If the SEC does not provide any comments on the Proxy Statement within the ten (10) day period following the filing of the preliminary Proxy Statement, the Company shall file the definitive Proxy Statement with the SEC promptly following the expiration of such ten (10) day period. (B) If the SEC provides comments on the Proxy Statement, the Company shall (i) respond to all such comments as promptly as practicable and use its reasonable best efforts to resolve all such comments with the SEC, and (ii) file the definitive Proxy Statement with the SEC within two (2) Business Days following the date on which the SEC confirms that it has no further comments on the Proxy Statement or otherwise clears the Proxy Statement for mailing. The Company shall promptly notify Purchaser of the receipt of any comments from the SEC on the Proxy Statement and shall provide Purchaser with copies of all correspondence between the Company and the SEC relating to the Proxy Statement.
7.2.3.
Stockholder Meeting. The Company shall duly call, give notice of, convene and hold a meeting of its stockholders (the “Stockholder Meeting”) for the purpose of obtaining stockholder approval of the Amendment and satisfaction of the Authorized Shares Condition no later than sixty (60) days following the date of filing of the definitive Proxy Statement. The Company shall use its reasonable best efforts to solicit proxies in favor of the Amendment and shall include in the Proxy Statement the recommendation of the Board of Directors that stockholders vote in favor of the Amendment. If on the date of the Stockholder Meeting, or a date preceding the date on which the Stockholder Meeting is scheduled, the Company reasonably believes that (i) it will not receive proxies sufficient to obtain stockholder approval of the Amendment, whether or not a quorum would be present, or (ii) it will not have a quorum, then the Company may adjourn or postpone the Stockholder Meeting; provided, however, that any such adjournment or postponement shall not extend beyond ninety (90) days following the date of this Agreement without the prior written consent of Purchaser.
7.2.4.
Filing of Amendment. Promptly following receipt of the requisite stockholder approval of the Amendment at the Stockholder Meeting, the Company shall file the Amendment with the Delaware Secretary of State and provide evidence of such filing to Purchaser.
7.2.5.
Reasonable Best Efforts. The Company shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to satisfy the Authorized Shares Condition as promptly as practicable; provided that the Company shall not be in default under this Agreement or the Warrant to the extent it exercises reasonable diligence in seeking to satisfy the Authorized Shares Condition; and provided, further, that in no event will the Company be in default under this Agreement or the Warrant if any failure of the Authorized Shares Condition results from the acts or omissions of Purchaser or
11
any other purchaser of the Units (i.e., failure of such purchaser to vote all of its shares entitled to vote on the Authorized Shares Increase in favor of the Authorized Shares Increase).
7.3.
Most Favored Nations. Other than other securities purchase agreements containing the same terms as this Agreement (other than the number of Units purchased), the Company has not entered into any side letter or similar agreement with any other subscriber, investor or potential investor in connection with such other subscriber’s, investor’s or potential investor’s direct or indirect investment in the Company or participation in the Offering. The Company represents, warrants, and covenants that it has not offered, and will not offer, to any other stockholder participating in the Offering any terms or conditions that are more favorable than those set forth in this Agreement. If, at any time on or after the date hereof, the Company offers or grants to any other stockholder participating in the Offering any rights, terms, or conditions that are more favorable than those provided to Purchaser under this Agreement (including, without limitation, with respect to the Purchase Price of the Units, warrant coverage, exercise price of the Warrant, anti-dilution protections, registration rights, information rights, board observation or participation rights, or any other economic or governance terms), then (a) the Company shall provide Purchaser with prompt written notice of such more favorable terms, and (b) such more favorable terms shall automatically and without further action by Purchaser be deemed to apply to Purchaser and this Agreement (and any related transaction documents) shall be deemed amended to incorporate such more favorable terms, effective as of the date such terms were first offered or granted to such other stockholder. If, at any time on or after the date hereof, the Company offers or grants to any other stockholder participating in the Offering any rights, terms, or conditions that are more favorable than those provided to Purchaser under this Agreement, then the Company shall promptly prepare an amendment to this Agreement, such that such more favorable terms shall be memorialized in the amendment and become binding upon the Company to the benefit of Purchaser.
7.4.
Standstill on Securities Issuances.
7.4.1.
From the date of this Agreement until such time as the Amendment has been duly filed with the Delaware Secretary of State (the “Standstill Period”), the Company shall not, without the prior written consent of Purchaser, directly or indirectly, issue, sell, grant or otherwise dispose of, or agree or commit to issue, sell, grant or otherwise dispose of, any shares of Common Stock, Preferred Stock, or any other equity securities of the Company, or any securities convertible into, exchangeable for, or exercisable for equity securities of the Company, or any options, warrants, or other rights to acquire any such equity securities.
7.4.2.
Notwithstanding the foregoing, the restrictions set forth in Section 7.4(i) shall not apply to: (A) the issuance of Units, Shares and Warrants pursuant to and in accordance with the terms of this Agreement and the Offering; and (B) other than those securities that are the subject of the Share Reservation Waivers, the issuance of shares of Common Stock upon the exercise or conversion of Derivative Securities outstanding as of the date hereof, in accordance with the terms of such Derivative Securities as in effect on the date hereof.
7.4.3.
The Company shall provide Purchaser with prompt written notice of the filing of the Amendment with the Delaware Secretary of State, together with evidence of such
12
filing, and upon such filing, the Standstill Period shall automatically terminate without further action by either party.
8.
MISCELLANEOUS.
8.1.
Governing Law. The validity and interpretation of this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. Each of the parties hereto and their assigns hereby consents to the exclusive jurisdiction and venue of the Courts of the State of Delaware, and the United States District Court for the State of Delaware with respect to any matter relating to this Agreement and performance of the parties’ obligations hereunder, the documents and instruments executed and delivered concurrently herewith or pursuant hereto and performance of the parties’ obligations thereunder and each of the parties hereto hereby consents to the personal jurisdiction of such courts and shall subject itself to such personal jurisdiction. Any action, suit or proceeding relating to such matters shall be commenced, pursued, defended and resolved only in such courts and any appropriate appellate court having jurisdiction to hear an appeal from any judgment entered in such courts. The parties irrevocably waive the defense of an inconvenient forum to the maintenance of such suit or proceeding. Service of process in any action, suit or proceeding relating to such matters may be made and served within or outside the State of Delaware by registered or certified mail to the parties and their representatives at their respective addresses specified in Section 8.6, providedthat a reasonable time, not less than thirty (30) days, is allowed for response. Service of process may also be made in such other manner as may be permissible under the applicable court rules. THE PARTIES HERETO WAIVE TRIAL BY JURY.
8.2.
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, executors, and administrators of the parties hereto.
8.3.
Entire Agreement. This Agreement and the exhibits and schedules attached hereto, and the other documents, including the Preemptive Rights Waiver and Share Reservation Waivers, delivered pursuant hereto and thereto, constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants, or agreements except as specifically set forth herein or therein. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto and their respective successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided herein.
8.4.
Severability. In case any provision of this Agreement shall be invalid, illegal, or unenforceable, it shall to the extent practicable, be modified so as to make it valid, legal and enforceable and to retain as nearly as practicable the intent of the parties, and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
8.5.
Amendment and Waiver. Except as otherwise provided herein, any term of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively, and either for a
13
specified period of time or indefinitely), with the written consent of the Company and Purchaser. Any amendment or waiver effected in accordance with this Section 8.5 shall be binding upon each future holder of any security purchased under this Agreement and the Company.
8.6.
Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be effective when delivered personally, or sent by facsimile and in each case with a confirming email (with receipt confirmed), provided that a copy is mailed by registered mail, return receipt requested, or when received by the addressee, if sent by Express Mail, Federal Express or other express delivery service (receipt requested) in each case to the appropriate address set forth below:
If to the Company: DynaResource, Inc.
The Urban Towers of Las Colinas
222 W. Las Colinas Blvd.
Suite 1910 North Tower
Las Colinas / Irving, TX 75039
Email: rhazelton@dynaresource.com
Attention: Rohan Hazelton
If to Purchaser: Doug Metcalf
46 Lake Shore Drive North
Westford, MA 01886
Email: dmet64@gmail.com
8.7.
Faxes, Electronic Mail and Counterparts. This Agreement may be executed in one or more counterparts. Delivery of an executed counterpart of the Agreement or any exhibit attached hereto by facsimile transmission or electronic mail (any such delivery, an “Electronic Delivery”), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto, each other party hereto shall re-execute original forms hereof and deliver them in person to all other parties. No party hereto shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense relates to lack of authenticity.
8.8.
Expenses. Except as specifically provided herein, each party shall bear its own costs and expenses, including legal and accounting fees, in connection with this Agreement and the transactions contemplated hereunder.
8.9.
Titles and Subtitles. The titles of the paragraphs and subparagraphs of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
8.10.
Further Assurances. At any time and from time to time after the Closing, upon reasonable request of the other, each party shall do, execute, acknowledge and deliver such
14
further acts, assignments, transfers, conveyances and assurances as may be reasonably required for the more complete consummation of the transactions contemplated herein.
[Signatures on following page]
15
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.
DYNARESOURCE, INC.
By: /s/ Rohan Hazelton
Name: Rohan Hazelton
Title: Chief Executive Officer
/s/ Doug Metcalf
Doug Metcalf
16
EXHIBIT A
Form of Warrant
[see attached]
[Form of Warrant]
SCHEDULE A
Derivative Securities
Name of Holder |
Title of Derivative Securities |
No. of Derivative Securities |
Golden Post Rail, LLC |
Series C Preferred Stock |
1,734,992 |
Golden Post Rail, LLC |
Series E Preferred Stock |
1,552,795 |
Golden Post Rail, LLC |
Series D Warrants |
783,976 |
Gareth Nichol |
Series D Preferred Stock |
500,000 |
Ronald Vail |
Series D Preferred Stock |
100,000 |
Dale Petrini |
Series D Preferred Stock |
50,000 |
Rohan Hazelton |
Options |
750,000 |
Quinton Hennigh |
Options |
400,000 |
[Schedule A]
SCHEDULE B
Capitalization
Preferred Stockholders
Name of Holder |
Class of Preferred Stock |
No. of Shares |
Golden Post Rail, LLC |
Series C |
1,734,992 |
Gareth Nichol |
Series D |
500,000 |
Ronald Vail |
Series D |
100,000 |
Dale Petrini |
Series D |
50,000 |
Thomas R. Tillander |
Series D |
35,000 |
Ralph C. Whalen |
Series D |
25,000 |
Paul Menegay |
Series D |
12,500 |
Jane Menegay |
Series D |
12,500 |
Duane Menegay |
Series D |
12,500 |
Paul Mark Woods |
Series D |
12,500 |
Golden Post Rail, LLC |
Series E |
1,552,795 |
Reserve Requirements
Category |
Reserve Requirements |
Derivative Securities (Series C, D, and E Preferred Stock and Series D Warrants) |
10,450,184 |
Outstanding Equity Awards |
3,592,142 |
Equity Incentive Plans (exclusive of Outstanding Equity Awards) |
1,020,358 |
Warrants (Current Offering) |
6,666,666 |
[Schedule B]
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is made as of September 1, 2026, by and between DYNARESOURCE, INC., a Delaware corporation (the “Company”), and DALE PETRINI, an individual (“Purchaser”).
RECITALS
A.
The Company intends to issue and sell up to 6,666,666 units, each unit consisting of one share of its common stock, par value $0.01 per share (“Common Stock”), and one warrant to purchase one share of Common Stock at an exercise price of $0.51 per share in a private offering with certain existing stockholders of the Company on the terms set forth below (the “Offering”).
B.
In connection with the Offering, certain existing stockholders of the Company have agreed to, on a one-time basis and for a period of up to 120 days, (i) waive all share reservation obligations of the Company under any and all certificates, instruments, plans and/or agreements corresponding to the securities listed on Schedule Ahereto (the “Derivative Securities”), and (ii) not exercise or convert any Derivative Securities until such time as the Company files an amendment to its Amended and Restated Certificate of Incorporation, as amended, to either increase its number of authorized shares of Common Stock or effect a reverse stock split of the Common Stock, in each case to satisfy all share reservation obligations of the Company (the “Amendment”).
C.
As part of the Offering, the Board of Directors of the Company (the “Board of Directors”) has authorized the issuance to Purchaser for the aggregate purchase price set forth below (the “Purchase Price”), units (the “Units”), with each Unit consisting of (i) one share of Common Stock (such shares of Common Stock included in the Units, the “Shares”), and (ii) a warrant to purchase one share of Common Stock at an exercise price of $0.51 per share (the “Warrant,” and such shares of Common Stock issuable upon exercise of the Warrant, the “Warrant Shares”), each such Unit being sold at a purchase price of $0.45 per Unit.
D.
Purchaser wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, the Units.
NOW, THEREFORE, in consideration of the foregoing premises and in reliance on the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which the parties hereby acknowledge, it is agreed as follows:
1.
DEFINITIONS.
1.1.
“Authorized Shares Increase” means an increase of the authorized shares of Common Stock or reverse stock split to accommodate the exercise of the Warrant to purchase
1
the Warrant Shares in accordance with the terms of the Warrant (taking into account all issued and outstanding shares of Common Stock and all shares of Common Stock required to be reserved under all (a) outstanding Derivative Securities, (b) outstanding equity awards, and (c) Company equity incentive plans).
1.2.
“Authorized Shares Condition” means the approval by the requisite stockholders of the Company at a duly called meeting or by written consent of the Amendment and the filing of such Amendment with the Delaware Secretary of State.
1.3.
“Business Day” means any day other than a Saturday, Sunday, or any day on which banking institutions in the State of Texas are authorized or required by law, regulation, or executive order to close.
1.4.
“Series C Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series C Senior Convertible Preferred Stock, as amended.
1.5.
“Series D Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series D Convertible Preferred Stock, as amended.
1.6.
“Series E Designation” means the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series E Convertible Preferred Stock, as amended.
1.7.
“Preemptive Rights Waiver” means the waiver by the Series C preferred stockholder of its preemptive rights and other anti-dilution protections under the Series C Designation in connection with the Offering.
1.8.
“Share Reservation Waivers” means (a) the waiver by the Series C and Series E preferred stockholder of the Company’s share reservation requirements under the Series C Designation and the Series E Designation, respectively; (b) the waiver by at least 85% of the Series D preferred stockholders of the Company’s share reservation requirements under the Series D Designation with respect to their Series D preferred stock; (c) the waiver by at least 88% of the Company’s existing warrant holders of the Company’s share reservation requirements under their outstanding warrants; (d) the waiver by all of the Company’s existing option holders of the Company’s share reservation requirements under their respective options; and (e) the agreement of each of the waiving Series C, D, and E preferred stockholders, warrant holders, and option holders not to convert or exercise, as applicable, any of their respective outstanding convertible preferred stock, warrants, and/or options, in each case, until after the Authorized Shares Condition is satisfied, subject to any other conditions set forth in such waivers.
2.
PURCHASE AND SALE OF UNITS.
2
2.1.
Purchase and Sale. In reliance upon the representations and warranties of the Company and Purchaser contained herein and subject to the terms and conditions set forth herein, at the Closing (as defined below), Purchaser shall purchase, and the Company shall sell and issue to Purchaser, 222,222 Units for an aggregate Purchase Price of $99,999.90 (based on a purchase price of $0.45 per Unit), which Purchase Price was delivered by Purchaser to the Company by wire transfer of good funds to the account specified by the Company in advance of signing this Agreement.
2.2.
Issuance of Warrant. The Warrant shall be in the form attached hereto as Exhibit A and shall be exercisable for a period commencing on the date the Authorized Shares Condition is satisfied and ending at 5:00 p.m., Central time, on the later of (a) 180 days following the issuance date of the Warrant, and (b) 30 days following the satisfaction of the Authorized Shares Condition (the “Exercise Period”) at an exercise price of $0.51 per Warrant Share, subject to adjustment as provided therein.
3.
CLOSING.
3.1.
Date and Time. The sale of Units will take place at a closing (the “Closing”) at the offices of the Company or at such other place (or remotely) as the Company and Purchaser shall agree in writing concurrent with the execution of this Agreement.
4.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
As a material inducement to Purchaser to enter into this Agreement and to purchase the Units, the Company represents and warrants that the following statements are true and correct in all material respects as of the date hereof and will be true and correct in all material respects at Closing, except as expressly qualified or modified herein.
4.1.
Organization and Good Standing. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has full corporate power and authority to enter into and perform its obligations under this Agreement, and to own its properties and to carry on its business in all jurisdictions as presently conducted and as proposed to be conducted. The Company and its subsidiaries have all governmental and other licenses and permits and authorizations to do business in all jurisdictions where their activities require such licenses, permits and authorizations, except where failure to obtain any such license, permit or authorization will not have a material adverse effect on the Company’s business.
4.2.
Capitalization. As of immediately prior to the Closing, the Company was authorized to issue 60,001,000 shares of capital stock, consisting of 40,000,000 shares of Common Stock and 20,001,000 shares of Preferred Stock (the “Preferred Stock”), of which 30,149,059 shares of Common Stock, 1,734,992 shares of Series C Preferred Stock, 760,000 shares of Series D Preferred Stock and 1,552,795 shares of Series E Preferred Stock were issued and outstanding. All outstanding shares of the Company’s capital stock have been duly authorized and validly issued, and are fully paid, non-assessable, and free of any pre-emptive rights, other than those certain preemptive rights set forth in the Series C Designation. Schedule B hereto sets forth a complete and accurate list of (a) the number, class and beneficial owners of the Preferred Stock as of the date hereof and (b) the reserve requirements of the Company with respect to shares of
3
Common Stock required to be reserved under all (w) outstanding Derivative Securities, (x) outstanding equity awards, (y) Company equity incentive plans and (z) the Warrants offered in connection with the Offering.
4.3.
Authorization and Enforcement. This Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights generally and to general principles of equity. The Company has full corporate power and authority necessary to enter into and deliver this Agreement and to perform its obligations hereunder.
4.4.
Reservation and Valid Issuance of Securities. Upon payment of the Purchase Price and issuance of the Units, (i) the Shares will be duly authorized, validly issued, fully paid, non-assessable and free of pre-emptive rights, (ii) the Warrant will be duly authorized, validly executed and delivered, and will constitute legal, valid and binding obligations of the Company, enforceable in accordance with its terms, and (iii) the Warrant Shares, when issued and paid for upon exercise of the Warrant in accordance with its terms, will be duly authorized, validly issued, fully paid, non-assessable and free of pre-emptive rights.
4.5.
Reservation of Warrant Shares. During the Exercise Period, the Company shall have reserved from its duly authorized capital stock the number of shares of Common Stock issuable upon exercise of the Warrant.
4.6.
No Conflict, Breach, Violation or Default; Third Party Consents. The execution, delivery and performance of this Agreement and the Warrant by the Company and the issuance and sale of the Units, including the Shares and the Warrant, and the issuance of the Warrant Shares upon exercise of the Warrant, will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under (i) the Company’s Amended and Restated Certificate of Incorporation, as amended, or the Company’s Bylaws, both as in effect on the date hereof (collectively, the “Company Documents”), (ii) any shareholder agreement or voting agreement to which any officer, director or holder of more than 5% of the Company’s securities is a party, (iii) any statute, rule, regulation or order of any governmental agency, self-regulatory agency, securities regulatory or insurance regulatory agency or body or any court, domestic or foreign, having jurisdiction over the Company or any of its assets or properties, or (iv) any material agreement or instrument to which the Company is a party or by which the Company is bound or to which any of its assets or properties is subject; except in the case of each of clauses (iii) and (iv), such as could not, individually or in the aggregate, have or reasonably be expected to result in a material adverse effect on the Company or its ability to perform its obligations hereunder. No approval of or filing with any governmental authority or other third-party entity or person is required for the Company to enter into, execute or perform this Agreement, the Warrant or any related transaction document.
4.7.
SEC Reports and Financial Statements.
4.7.1.
SEC Reports. The Company has made available to Purchaser through the SEC’s EDGAR system accurate and complete copies (excluding copies of exhibits) of
4
each report, quarterly report, annual report, current report, registration statement, and definitive proxy statement or information statement filed by the Company with the United States Securities and Exchange Commission (“SEC”) since December 31, 2023 (collectively, the “SEC Reports”). All statements, reports, schedules, forms and other documents required to have been filed by the Company with the SEC have been so filed. To the Company’s Knowledge, as of the time it was filed with the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing): (i) each of the SEC Reports complied in all material respects with the applicable requirements of the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as applicable; and (ii) none of the SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
4.7.2.
Financial Statements. The financial statements contained in the SEC Reports: (i) complied as to form in all material respects with the published rules and regulations of the SEC applicable thereto at the time of filing and as of the date of the Closing; (ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered (except as may be indicated in the notes to such financial statements and, in the case of unaudited statements, as permitted by Form 10-Q of the SEC, and except that unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end audit adjustments which will not, individually or in the aggregate, be material in amount); and (iii) fairly present, in all material respects, the financial position of the Company as of the respective dates thereof and the results of operations of the Company for the periods covered thereby, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. All adjustments considered necessary for a fair presentation of the financial statements have been included.
4.7.3.
Securities Law Compliance. Assuming the accuracy of the representations and warranties of Purchaser and each other purchaser, set forth in Section 5 of this Agreement or such other purchasers’ applicable securities purchase agreement, the offer and sale of the Units (including the Shares and the Warrant) and the issuance of the Warrant Shares upon exercise of the Warrant will constitute an exempted transaction under the Securities Act, and registration of the Units, Shares, Warrant and Warrant Shares is not required. The Company shall make such filings as may be necessary to comply with the federal securities laws and the “blue sky” laws of any state in connection with the offer and sale of the Units and the issuance of the Warrant Shares, which filings will be made in a timely manner.
4.7.4.
For the purposes of this Agreement, “Company’s Knowledge” means the actual knowledge of the executive officers (as defined in Rule 405 under the Securities Act) of the Company.
4.8.
Compliance with Law; No Disqualification.
4.8.1.
OFAC. Neither the Company nor any of its affiliates or any of their respective directors, officers, employees or agents is a Person that is, or is owned or controlled by Persons that are: (A) the subject of any sanctions administered by the U.S. Department of Treasury’s Office of Foreign Assets Control or the U.S. Department of State, the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions
5
authority (collectively, “Sanctions”), or (B) located, organized or resident in a country or territory that is the subject of Sanctions. Neither the Company nor any of its affiliates has engaged in, or is now engaged in, directly or indirectly, any dealings or transactions with any Person, or in any country or territory, that, at the time of the dealing or transaction, is or was the subject of Sanctions.
4.8.2.
Foreign Corrupt Practices Act. Neither the Company nor any director, officer, or employee of the Company, or to the Company’s Knowledge, any other person associated with or acting on behalf of the Company, including, without limitation, any agent or affiliate of the Company has (a) used any corporate funds for any unlawful contribution, gift, entertainment, or other unlawful expense relating to political activity or to influence official action; (b) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (c) made any bribe, rebate, payoff, influence payment, kickback, or other unlawful payment; or (d) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder; and the Company has instituted and maintains policies and procedures designed to ensure compliance therewith.
4.8.3.
No Disqualification Events. With respect to the Units (including the Shares, Warrant and Warrant Shares), neither the Company, nor any of its predecessors, directors, executive officers, or any beneficial owner (as that term is defined in Rule 13d-3 under the Exchange Act) of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale of the Units (each, an “Company Covered Person” and, collectively, “Company Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. The Company has exercised reasonable care to determine (i) the identity of each person that is a Company Covered Person; and (ii) whether any Company Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e) under the Securities Act, and has furnished to Purchaser a copy of any disclosures provided thereunder.
4.9.
No Directed Selling Efforts or General Solicitation. Neither the Company nor any Person, as defined below, acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D promulgated under the Securities Act) in connection with the offer or sale of any of the Units (including the Shares and the Warrant). For purposes of this Agreement, “Person” means any individual, corporation, company, limited liability company, partnership, limited liability partnership, trust, estate, proprietorship, joint venture, association, organization or entity.
4.10.
Solvency. As of the date of this Agreement (assuming the closing of the Offering), the Company is solvent. For purposes of this Section 4.10, the Company shall be deemed to be solvent if (a) the fair value of its assets exceeds its total liabilities, and (b) the Company is able to pay its debts as they become due in the ordinary course of business.
5.
REPRESENTATIONS AND WARRANTIES OF PURCHASER.
6
Purchaser hereby represents, warrants and covenants to the Company as follows:
5.1.
Legal Power. Purchaser has the requisite power and is authorized to enter into this Agreement, to purchase the Units hereunder, and to carry out and perform his obligations under the terms of this Agreement.
5.2.
Due Execution. This Agreement has been duly authorized, executed and delivered by Purchaser, and, upon due execution and delivery by the Company, this Agreement will be a valid and binding agreement of Purchaser.
5.3.
Access to Information. Purchaser understands that an investment in the Units involves a high degree of risk and long term or permanent illiquidity, including, risk of loss of their entire investment. Purchaser has been given full and complete access to the Company for the purpose of obtaining such information as Purchaser or his qualified representative has reasonably requested in connection with the decision to purchase the Units. Purchaser represents that Purchaser has received and reviewed copies of the SEC Reports. Purchaser represents that Purchaser has been afforded the opportunity to ask questions of the officers of the Company regarding its business prospects and the Units, all as Purchaser or Purchaser’s investor’s representatives have deemed necessary to make an informed investment decision to purchase the Units.
5.4.
Restricted Securities.
5.4.1.
Purchaser has been advised that none of the Units, including the Shares and the Warrant underlying the Units, or the Warrant Shares, have been registered under the Securities Act or any other applicable securities laws and that the Units are being offered and sold pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D thereunder, and that the Company’s reliance upon Section 4(a)(2) and/or Rule 506 of Regulation D is predicated in part on such Purchaser representations as contained herein. Purchaser acknowledges that the Shares, Warrant and Warrant Shares will be issued as “restricted securities” as defined by Rule 144 promulgated pursuant to the Securities Act. None of the Shares, Warrant or Warrant Shares may be resold in the absence of an effective registration thereof under the Securities Act and applicable state securities laws unless, in the opinion of counsel reasonably satisfactory to the Company, an applicable exemption from registration is available.
5.4.2.
Purchaser represents that Purchaser is acquiring the Units for Purchaser’s own account, and not as nominee or agent, for investment purposes only and not with a view to, or for sale in connection with, a distribution, as that term is used in Section 2(11) of the Securities Act, in a manner which would require registration under the Securities Act or any state securities laws.
5.4.3.
Purchaser understands and acknowledges that the certificates or book-entry statements representing the Shares and the Warrant will bear substantially the following legend:
“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE SOLD,
7
DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES OR (ii) THE SECURITIES ARE SOLD PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. NOTWITHSTANDING THE FOREGOING, NO NOTICE TO OR CONSENT OF THE COMPANY SHALL BE REQUIRED IN CONNECTION WITH ANY SUCH SALE OR TRANSFERS.”
5.4.4.
Purchaser acknowledges that an investment in the Units is not liquid and is transferable only under limited conditions. Purchaser acknowledges that the Shares, Warrant and Warrant Shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Purchaser is aware of the provisions of Rule 144 promulgated under the Securities Act, which permits limited resale of restricted securities subject to the satisfaction of certain conditions and that such Rule is not now available and, in the future, may not become available for resale of any of the Shares, Warrant or Warrant Shares.
5.5.
Accredited Investor; Sophistication and Ability to Bear Risk of Loss. Purchaser is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act as of the date hereof and at any time he exercises the Warrant. Purchaser acknowledges that he is able to protect his interests in connection with the acquisition of the Units and can bear the economic risk of investment in such securities without producing a material adverse change in Purchaser’s financial condition. Purchaser has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of an investment in the Units.
5.6.
No Advertising. Purchaser has not received any general solicitation or advertising regarding the offer of the Units.
5.7.
Public Statements. Purchaser agrees not to issue any public statement with respect to the offering of the Units, Purchaser’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law.
5.8.
Confidential. Purchaser acknowledges that the information made available to Purchaser other than the SEC Reports is confidential and non-public and agrees that all such information shall be kept in confidence by Purchaser and neither used by Purchaser for Purchaser’s own benefit (other than in connection with this subscription) nor disclosed to any third party for any reason; provided, however, that (a) Purchaser may disclose such information to his affiliates and advisors who may have a need for such information in connection with providing advice to Purchaser with respect to its investment in the Company so long as such affiliates and advisors have an obligation of confidentiality, (b) this obligation shall not apply to any such information that (i) is part of the public knowledge or literature and readily accessible at the date hereof, (ii) becomes part of the public knowledge or literature and readily accessible by publication (except as a result of a breach of this provision), (iii) is being disclosed pursuant to a subpoena or court order or is otherwise required to be provided by law, or (iv) is received from third parties without an obligation of confidentiality (except third parties who disclose such information in violation of
8
any confidentiality agreements or obligations, including, without limitation, any subscription or other similar agreement entered into with the Company) and (c) Purchaser may disclose such information as is necessary to enforce the terms of this Agreement.
5.9.
Exempt Offering. Purchaser understands that the Units are being offered and sold to him in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of Purchaser in order to determine the availability of such exemptions and the eligibility of Purchaser to acquire the Units.
6.
CONDITIONS.
6.1.
Conditions Precedent to the Obligation of the Company to Close and to Sell the Units. The obligation hereunder of the Company to close and issue and sell the Units to Purchaser at the Closing is subject to the satisfaction or waiver, at or before such Closing of the conditions set forth below. These conditions are for the Company’s sole benefit and may be waived by the Company at any time in their sole discretion.
6.1.1.
Accuracy of Purchaser’s Representations and Warranties. The representations and warranties of Purchaser shall be true and correct in all material respects as of the date when made and as of the Closing as though made at that time, except for representations and warranties that are expressly made as of a particular date, which shall be true and correct in all material respects as of such date.
6.1.2.
Performance by Purchaser. Purchaser shall have performed, satisfied, and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by Purchaser at or prior to the Closing.
6.1.3.
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
6.1.4.
Delivery of Purchase Price. The Purchase Price for the Units shall be available in cleared funds and authorized by the Company and Purchaser, in their sole and absolute discretion, for distribution on the Closing in accordance with the terms hereof.
6.1.5.
Receipt of Waivers. The Company shall have received the necessary Preemptive Rights Waiver and Share Reservation Waivers.
6.1.6.
Voting Agreements. The Company and each of Golden Post Rail, LLC, Ocean Partners UK Limited, and Gareth Nichol shall have entered into voting agreements (the “Voting Agreements”) pursuant to which such stockholders shall have agreed to vote all of their shares entitled to vote at the Stockholder Meeting in favor of the Amendment, in accordance with and subject to the terms and conditions of the Voting Agreements.
9
6.2.
Conditions Precedent to the Obligation of Purchaser to Close and to Purchase the Units. The obligation hereunder of Purchaser to purchase the Units and consummate the transactions contemplated by this Agreement is subject to the satisfaction or waiver, at or before the Closing, of each of the conditions set forth below. These conditions are for Purchaser’s sole benefit and may be waived by Purchaser at any time in his sole discretion.
6.2.1.
Accuracy of the Company’s Representations and Warranties. Each of the representations and warranties of the Company in this Agreement shall be true and correct in all material respects as of the Closing, except for representations and warranties that speak as of a particular date, which shall be true and correct in all material respects as of such date.
6.2.2.
Performance by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing.
6.2.3.
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
6.2.4.
No Proceedings or Litigation. No action, suit or proceeding before any arbitrator or any governmental authority shall have been commenced, and no investigation by any governmental authority shall have been initiated, against the Company, or any of the officers, directors or affiliates of the Company seeking to restrain, prevent or change the transactions contemplated by this Agreement, or seeking damages in connection with such transactions.
6.2.5.
Units. At the Closing, the Company shall have delivered to Purchaser evidence of delivery of the Shares along with all appropriate board resolutions or other necessary documentation. The Company shall also deliver this Agreement and the Warrant, duly executed by the Company.
6.2.6.
Receipt of Waivers. The Company shall have received the necessary Preemptive Rights Waiver and Share Reservation Waivers.
6.2.7.
Voting Agreements. The Company and each of Golden Post Rail, LLC, Ocean Partners UK Limited, and Gareth Nichol shall have entered into the Voting Agreements.
7.
COVENANTS AND AGREEMENTS
7.1.
Use of Proceeds. The Company will use the net proceeds from the sale of the Units for a repayment of a portion of the credit facility provided to the Company, and for general corporate and working capital purposes. The Company agrees that, without the prior written consent of Purchaser, the Company will not use any such proceeds (i) to redeem, repurchase or otherwise acquire, or to make any distributions in respect of, any of the Company’s securities, (ii) to repay or otherwise satisfy any indebtedness of the Company (other than the aforementioned credit facility), or (iii) for any personal, family, or household purpose.
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7.2.
Satisfaction of Authorized Shares Condition. The Company covenants as follows with respect to the Authorized Shares Condition:
7.2.1.
Preliminary Proxy Statement. The Company shall prepare and file with the SEC a preliminary proxy statement (or preliminary information statement, if applicable) relating to the Authorized Shares Condition (the “Proxy Statement”) no later than thirty (30) days following the date of this Agreement. The Proxy Statement shall comply in all material respects with all applicable requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder.
7.2.2.
Definitive Proxy Statement. (A) If the SEC does not provide any comments on the Proxy Statement within the ten (10) day period following the filing of the preliminary Proxy Statement, the Company shall file the definitive Proxy Statement with the SEC promptly following the expiration of such ten (10) day period. (B) If the SEC provides comments on the Proxy Statement, the Company shall (i) respond to all such comments as promptly as practicable and use its reasonable best efforts to resolve all such comments with the SEC, and (ii) file the definitive Proxy Statement with the SEC within two (2) Business Days following the date on which the SEC confirms that it has no further comments on the Proxy Statement or otherwise clears the Proxy Statement for mailing. The Company shall promptly notify Purchaser of the receipt of any comments from the SEC on the Proxy Statement and shall provide Purchaser with copies of all correspondence between the Company and the SEC relating to the Proxy Statement.
7.2.3.
Stockholder Meeting. The Company shall duly call, give notice of, convene and hold a meeting of its stockholders (the “Stockholder Meeting”) for the purpose of obtaining stockholder approval of the Amendment and satisfaction of the Authorized Shares Condition no later than sixty (60) days following the date of filing of the definitive Proxy Statement. The Company shall use its reasonable best efforts to solicit proxies in favor of the Amendment and shall include in the Proxy Statement the recommendation of the Board of Directors that stockholders vote in favor of the Amendment. If on the date of the Stockholder Meeting, or a date preceding the date on which the Stockholder Meeting is scheduled, the Company reasonably believes that (i) it will not receive proxies sufficient to obtain stockholder approval of the Amendment, whether or not a quorum would be present, or (ii) it will not have a quorum, then the Company may adjourn or postpone the Stockholder Meeting; provided, however, that any such adjournment or postponement shall not extend beyond ninety (90) days following the date of this Agreement without the prior written consent of Purchaser.
7.2.4.
Filing of Amendment. Promptly following receipt of the requisite stockholder approval of the Amendment at the Stockholder Meeting, the Company shall file the Amendment with the Delaware Secretary of State and provide evidence of such filing to Purchaser.
7.2.5.
Reasonable Best Efforts. The Company shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to satisfy the Authorized Shares Condition as promptly as practicable; provided that the Company shall not be in default under this Agreement or the Warrant to the extent it exercises reasonable diligence in seeking to satisfy the Authorized Shares Condition; and provided, further, that in no event will the Company be in default under this Agreement or the Warrant if any failure of the Authorized Shares Condition results from the acts or omissions of Purchaser or
11
any other purchaser of the Units (i.e., failure of such purchaser to vote all of its shares entitled to vote on the Authorized Shares Increase in favor of the Authorized Shares Increase).
7.3.
Most Favored Nations. Other than other securities purchase agreements containing the same terms as this Agreement (other than the number of Units purchased), the Company has not entered into any side letter or similar agreement with any other subscriber, investor or potential investor in connection with such other subscriber’s, investor’s or potential investor’s direct or indirect investment in the Company or participation in the Offering. The Company represents, warrants, and covenants that it has not offered, and will not offer, to any other stockholder participating in the Offering any terms or conditions that are more favorable than those set forth in this Agreement. If, at any time on or after the date hereof, the Company offers or grants to any other stockholder participating in the Offering any rights, terms, or conditions that are more favorable than those provided to Purchaser under this Agreement (including, without limitation, with respect to the Purchase Price of the Units, warrant coverage, exercise price of the Warrant, anti-dilution protections, registration rights, information rights, board observation or participation rights, or any other economic or governance terms), then (a) the Company shall provide Purchaser with prompt written notice of such more favorable terms, and (b) such more favorable terms shall automatically and without further action by Purchaser be deemed to apply to Purchaser and this Agreement (and any related transaction documents) shall be deemed amended to incorporate such more favorable terms, effective as of the date such terms were first offered or granted to such other stockholder. If, at any time on or after the date hereof, the Company offers or grants to any other stockholder participating in the Offering any rights, terms, or conditions that are more favorable than those provided to Purchaser under this Agreement, then the Company shall promptly prepare an amendment to this Agreement, such that such more favorable terms shall be memorialized in the amendment and become binding upon the Company to the benefit of Purchaser.
7.4.
Standstill on Securities Issuances.
7.4.1.
From the date of this Agreement until such time as the Amendment has been duly filed with the Delaware Secretary of State (the “Standstill Period”), the Company shall not, without the prior written consent of Purchaser, directly or indirectly, issue, sell, grant or otherwise dispose of, or agree or commit to issue, sell, grant or otherwise dispose of, any shares of Common Stock, Preferred Stock, or any other equity securities of the Company, or any securities convertible into, exchangeable for, or exercisable for equity securities of the Company, or any options, warrants, or other rights to acquire any such equity securities.
7.4.2.
Notwithstanding the foregoing, the restrictions set forth in Section 7.4(i) shall not apply to: (A) the issuance of Units, Shares and Warrants pursuant to and in accordance with the terms of this Agreement and the Offering; and (B) other than those securities that are the subject of the Share Reservation Waivers, the issuance of shares of Common Stock upon the exercise or conversion of Derivative Securities outstanding as of the date hereof, in accordance with the terms of such Derivative Securities as in effect on the date hereof.
7.4.3.
The Company shall provide Purchaser with prompt written notice of the filing of the Amendment with the Delaware Secretary of State, together with evidence of such
12
filing, and upon such filing, the Standstill Period shall automatically terminate without further action by either party.
8.
MISCELLANEOUS.
8.1.
Governing Law. The validity and interpretation of this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. Each of the parties hereto and their assigns hereby consents to the exclusive jurisdiction and venue of the Courts of the State of Delaware, and the United States District Court for the State of Delaware with respect to any matter relating to this Agreement and performance of the parties’ obligations hereunder, the documents and instruments executed and delivered concurrently herewith or pursuant hereto and performance of the parties’ obligations thereunder and each of the parties hereto hereby consents to the personal jurisdiction of such courts and shall subject itself to such personal jurisdiction. Any action, suit or proceeding relating to such matters shall be commenced, pursued, defended and resolved only in such courts and any appropriate appellate court having jurisdiction to hear an appeal from any judgment entered in such courts. The parties irrevocably waive the defense of an inconvenient forum to the maintenance of such suit or proceeding. Service of process in any action, suit or proceeding relating to such matters may be made and served within or outside the State of Delaware by registered or certified mail to the parties and their representatives at their respective addresses specified in Section 8.6, providedthat a reasonable time, not less than thirty (30) days, is allowed for response. Service of process may also be made in such other manner as may be permissible under the applicable court rules. THE PARTIES HERETO WAIVE TRIAL BY JURY.
8.2.
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, executors, and administrators of the parties hereto.
8.3.
Entire Agreement. This Agreement and the exhibits and schedules attached hereto, and the other documents, including the Preemptive Rights Waiver and Share Reservation Waivers, delivered pursuant hereto and thereto, constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants, or agreements except as specifically set forth herein or therein. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto and their respective successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided herein.
8.4.
Severability. In case any provision of this Agreement shall be invalid, illegal, or unenforceable, it shall to the extent practicable, be modified so as to make it valid, legal and enforceable and to retain as nearly as practicable the intent of the parties, and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
8.5.
Amendment and Waiver. Except as otherwise provided herein, any term of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively, and either for a
13
specified period of time or indefinitely), with the written consent of the Company and Purchaser. Any amendment or waiver effected in accordance with this Section 8.5 shall be binding upon each future holder of any security purchased under this Agreement and the Company.
8.6.
Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be effective when delivered personally, or sent by facsimile and in each case with a confirming email (with receipt confirmed), provided that a copy is mailed by registered mail, return receipt requested, or when received by the addressee, if sent by Express Mail, Federal Express or other express delivery service (receipt requested) in each case to the appropriate address set forth below:
If to the Company: DynaResource, Inc.
The Urban Towers of Las Colinas
222 W. Las Colinas Blvd.
Suite 1910 North Tower
Las Colinas / Irving, TX 75039
Email: rhazelton@dynaresource.com
Attention: Rohan Hazelton
If to Purchaser: Dale Petrini
29 Bash Place
Houston, TX 77027
Email: dgpetrini@gmail.com
8.7.
Faxes, Electronic Mail and Counterparts. This Agreement may be executed in one or more counterparts. Delivery of an executed counterpart of the Agreement or any exhibit attached hereto by facsimile transmission or electronic mail (any such delivery, an “Electronic Delivery”), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto, each other party hereto shall re-execute original forms hereof and deliver them in person to all other parties. No party hereto shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense relates to lack of authenticity.
8.8.
Expenses. Except as specifically provided herein, each party shall bear its own costs and expenses, including legal and accounting fees, in connection with this Agreement and the transactions contemplated hereunder.
8.9.
Titles and Subtitles. The titles of the paragraphs and subparagraphs of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
8.10.
Further Assurances. At any time and from time to time after the Closing, upon reasonable request of the other, each party shall do, execute, acknowledge and deliver such
14
further acts, assignments, transfers, conveyances and assurances as may be reasonably required for the more complete consummation of the transactions contemplated herein.
[Signatures on following page]
15
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.
DYNARESOURCE, INC.
By: /s/ Rohan Hazelton
Name: Rohan Hazelton
Title: Chief Executive Officer
/s/ Dale Petrini
Dale Petrini
16
EXHIBIT A
Form of Warrant
[see attached]
[Form of Warrant]
SCHEDULE A
Derivative Securities
Name of Holder |
Title of Derivative Securities |
No. of Derivative Securities |
Golden Post Rail, LLC |
Series C Preferred Stock |
1,734,992 |
Golden Post Rail, LLC |
Series E Preferred Stock |
1,552,795 |
Golden Post Rail, LLC |
Series D Warrants |
783,976 |
Gareth Nichol |
Series D Preferred Stock |
500,000 |
Ronald Vail |
Series D Preferred Stock |
100,000 |
Dale Petrini |
Series D Preferred Stock |
50,000 |
Rohan Hazelton |
Options |
750,000 |
Quinton Hennigh |
Options |
400,000 |
[Schedule A]
SCHEDULE B
Capitalization
Preferred Stockholders
Name of Holder |
Class of Preferred Stock |
No. of Shares |
Golden Post Rail, LLC |
Series C |
1,734,992 |
Gareth Nichol |
Series D |
500,000 |
Ronald Vail |
Series D |
100,000 |
Dale Petrini |
Series D |
50,000 |
Thomas R. Tillander |
Series D |
35,000 |
Ralph C. Whalen |
Series D |
25,000 |
Paul Menegay |
Series D |
12,500 |
Jane Menegay |
Series D |
12,500 |
Duane Menegay |
Series D |
12,500 |
Paul Mark Woods |
Series D |
12,500 |
Golden Post Rail, LLC |
Series E |
1,552,795 |
Reserve Requirements
Category |
Reserve Requirements |
Derivative Securities (Series C, D, and E Preferred Stock and Series D Warrants) |
10,450,184 |
Outstanding Equity Awards |
3,592,142 |
Equity Incentive Plans (exclusive of Outstanding Equity Awards) |
1,020,358 |
Warrants (Current Offering) |
6,666,666 |
[Schedule B]
WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF, EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS, OR (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.
Warrant Certificate No.: 1
Original Issue Date: September 1, 2026
FOR VALUE RECEIVED, DynaResource, Inc., a Delaware corporation (the “Company”), hereby certifies that Golden Post Rail, LLC, a Texas limited liability company, or its registered assigns (the “Holder”) is entitled to purchase from the Company 1,913,889 duly authorized, validly issued, fully paid, and nonassessable shares of Common Stock at a purchase price per share of $0.51 (subject to adjustment as provided herein, the “Exercise Price”), all subject to the terms, conditions, and adjustments set forth below in this Warrant. Certain capitalized terms used herein are defined in Section 1 hereof.
This Warrant has been issued pursuant to the terms of the Securities Purchase Agreement of even date herewith (the “Purchase Agreement”), between the Company and the Holder.
1.
Definitions. As used in this Warrant, the following terms have the respective meanings set forth below:
“Aggregate Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price in effect as of the Exercise Date in accordance with the terms of this Warrant.
“Authorized Shares Condition” means the approval by the requisite stockholders of the Company at a duly called meeting or by written consent of an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the authorized shares of Common Stock or effect a reverse stock split to accommodate the exercise of this Warrant to purchase the Warrant Shares in accordance with the terms of this Warrant (taking into account all issued and outstanding shares of Common Stock and all shares of Common Stock required to be reserved under all (a) outstanding Convertible Securities and Options, (b) outstanding equity awards, and (c) Company equity incentive plans and the filing of such amendment with the Delaware Secretary of State.
“Board” means the board of directors of the Company.
“Business Day” means any day, except a Saturday, Sunday, or legal holiday on which banking institutions in the city of Dallas, Texas are authorized or obligated by law or executive order to close.
“Common Stock” means the common stock, par value $0.01 per share, of the Company, and any capital stock into which such Common Stock shall have been converted, exchanged, or reclassified following the date hereof.
“Company” has the meaning set forth in the preamble.
“Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options.
“Excluded Issuances” means any issuance or sale (or deemed issuance or sale in accordance with Section 4(d)) by the Company after the Original Issue Date of: (a) shares of Common Stock issued upon the exercise of this Warrant; (b) shares of Common Stock (as such number of shares is equitably adjusted for subsequent stock splits, stock combinations, stock dividends, and recapitalizations) issued directly or upon the exercise of Options to directors, officers, employees, or consultants of the Company in connection with their service as directors of the Company, their employment by the Company, or their retention as consultants by the Company, in each case authorized by the Board and issued pursuant to the Company’s 2024 Amended and Restated Equity Incentive Plan (including all such shares of Common Stock and Options outstanding prior to the Original Issue Date); (c) shares of Common Stock issued upon the conversion or exercise of Options (other than Options covered by clause (b) above) or Convertible Securities issued prior to the Original Issue Date, provided that such securities are not amended after the date hereof to increase the number of shares of Common Stock issuable thereunder or to lower the exercise or conversion price thereof; (d) shares of Common Stock, Options, or Convertible Securities issued (i) to Persons in connection with a joint venture, strategic alliance, or other commercial relationship with such Person (including Persons that are customers, suppliers, and strategic partners of the Company) relating to the operation of the Company’s business and not for the primary purpose of raising equity capital, (ii) in connection with a transaction in which the Company, directly or indirectly, acquires another business or its tangible or intangible assets, or (iii) to lenders as equity kickers in connection with debt financings of the Company, in each case where such transactions have been approved by the Board; or (e) shares of Common Stock in an offering for cash for the account of the Company that is underwritten on a firm commitment basis and is registered with the Securities and Exchange Commission under the Securities Act.
“Exercise Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall have been satisfied at or prior to 5:00 p.m., Central time, on a Business Day, including the receipt by the Company of the Exercise Notice, the Warrant, and the Aggregate Exercise Price.
“Exercise Notice” has the meaning set forth in Section 3(a)(i).
“Exercise Period” has the meaning set forth in Section 2.
2
“Exercise Price” has the meaning set forth in the preamble.
“Fair Market Value” means, as of any particular date: (a) the volume weighted average of the closing sales prices of the Common Stock for such day on all domestic securities exchanges on which the Common Stock may at the time be listed; (b) if there have been no sales of the Common Stock on any such exchange on any such day, the average of the highest bid and lowest ask prices for the Common Stock on all such exchanges at the end of such day; (c) if on any such day the Common Stock is not listed on a domestic securities exchange, the closing sales price of the Common Stock as quoted on the OTC Markets or similar quotation system or association for such day; or (d) if there have been no sales of the Common Stock on the OTC Markets or similar quotation system or association on such day, the average of the highest bid and lowest ask prices for the Common Stock quoted on the OTC Markets or similar quotation system or association at the end of such day; in each case, averaged over twenty (20) consecutive Business Days ending on the Business Day immediately prior to the day as of which “Fair Market Value” is being determined; provided, that if the Common Stock is listed on any domestic securities exchange, the term “Business Day” as used in this sentence means Business Days on which such exchange is open for trading. If at any time the Common Stock is not listed on any domestic securities exchange or quoted on the OTC Markets or similar quotation system or association, the “Fair Market Value” of the Common Stock shall be the fair market value per share as determined jointly by the Board and the Holder; provided, that if the Board and the Holder are unable to agree on the fair market value per share of the Common Stock within a reasonable period of time (not to exceed 30 days from the Company’s receipt of the Exercise Notice), such fair market value shall be determined by a nationally recognized investment banking, accounting, or valuation firm engaged by the Company. The determination of such firm shall be final and conclusive, and the fees and expenses of such valuation firm shall be borne by the Company.
“Holder” has the meaning set forth in the preamble.
“Options” means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities.
“Original Issue Date” means the Original Issue Date set forth above.
“OTC Markets” means the OTC Markets Group Inc. electronic inter-dealer quotation system, including OTCQX, OTCQB, OTCID, and Pink Limited.
“Person” means any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, incorporated organization, or government or department or agency thereof.
“Purchase Agreement” has the meaning set forth in the preamble.
“Securities Act” has the meaning set forth in Section 10(a).
“Warrant” means this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.
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“Warrant Shares” means the shares of Common Stock or other capital stock of the Company then purchasable upon exercise of this Warrant in accordance with the terms of this Warrant.
2.
Exercise Period. Subject to the terms and conditions hereof, at any time and from time to time during the period commencing on the date the Authorized Shares Condition is satisfied and continuing until 5:00 p.m., Central time, on the later of (a) 180 days following the Original Issue Date, and (b) 30 days following the date the Authorized Shares Condition is satisfied, or, if such day is not a Business Day, on the next succeeding Business Day (the “Exercise Period”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein).
3.
Exercise of Warrant.
3.1.
Exercise Procedure. This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares, upon:
3.1.1.
surrender of this Warrant to the Company at its then principal executive offices, together with an Exercise Notice in the form attached hereto as Exhibit A (each, an “Exercise Notice”), duly completed (including specifying the number of Warrant Shares to be purchased) and executed; and
3.1.2.
payment to the Company of the Aggregate Exercise Price in accordance with Section 3(b).
3.2.
Payment of the Aggregate Exercise Price. Payment of the Aggregate Exercise Price shall be made by delivery to the Company of a certified or official bank check payable to the order of the Company or by wire transfer of immediately available funds to an account designated in writing by the Company, in the amount of such Aggregate Exercise Price.
3.3.
Delivery of Stock Certificates. Upon receipt by the Company of the Exercise Notice, surrender of this Warrant, and payment of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in any event within three (3) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise, or, at the Company’s election, deliver (or cause to be delivered) to the Holder evidence of such Warrant Shares having been credited to the Holder’s account in book-entry form on the books of the Company or its transfer agent, together with cash in lieu of any fraction of a share, as provided in Section 3(d) hereof. The stock certificate or certificates or book-entry shares so delivered shall be registered in the name of the Holder or, subject to compliance with Section 6 below, such other Person’s name as shall be designated in the Exercise Notice. This Warrant shall be deemed to have been exercised and such certificate or certificates of Warrant Shares or book-entry shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the Exercise Date.
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3.4.
Fractional Shares. The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant. As to any fraction of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of (i) such fraction multiplied by (ii) the Fair Market Value of one Warrant Share on the Exercise Date.
3.5.
Delivery of New Warrant. Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued in accordance with Section 3(c) hereof, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant.
3.6.
Valid Issuance of Warrant and Warrant Shares; Payment of Taxes. With respect to the exercise of this Warrant, the Company hereby represents, covenants, and agrees:
3.6.1.
This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.
3.6.2.
All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid, and non-assessable, issued without violation of any preemptive or similar rights of any stockholder of the Company and free and clear of all taxes, liens, and charges.
3.6.3.
The Company shall take all such actions as may be necessary to ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).
3.6.4.
The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder, and no such issuance or delivery shall be made unless and until the Person requesting such issuance has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid.
3.7.
Conditional Exercise. Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company (pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case
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such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.
3.8.
Reservation of Shares. During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Exercise Price. The Company shall not increase the par value of any Warrant Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.
4.
Adjustment to Exercise Price and Number of Warrant Shares. In order to prevent dilution of the purchase rights granted under this Warrant, the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 4 (in each case, after taking into consideration any prior adjustments pursuant to this Section 4).
4.1.
Adjustment to Exercise Price and Warrant Shares Upon Dividend, Subdivision or Combination of Common Stock. If the Company shall, at any time or from time to time after the Original Issue Date, (i) pay a dividend or make any other distribution upon the Common Stock or any other capital stock of the Company payable in shares of Common Stock or in Options or Convertible Securities, or (ii) subdivide (by any stock split, recapitalization, or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to any such dividend, distribution, or subdivision shall be proportionately reduced and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately increased. If the Company at any time combines (by combination, reverse stock split, or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately decreased. Any adjustment under this Section 4(a) shall become effective at the close of business on the date the dividend, subdivision, or combination becomes effective.
4.2.
Adjustment to Exercise Price and Warrant Shares Upon Reorganization, Reclassification, Consolidation, or Merger. In the event of any (i) capital reorganization of the Company, (ii) reclassification of the stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split-up, or combination of shares), (iii) consolidation or merger of the Company with or into another Person, (iv) sale of all or substantially all of the Company’s assets to another Person or (v) other similar transaction (other than any such transaction covered by Section 4(a)), in each case which entitles the holders of Common Stock to receive (either directly or upon subsequent liquidation) stock, securities, or assets with respect to or in exchange for Common Stock, each Warrant shall, immediately after such reorganization, reclassification, consolidation, merger, sale, or similar transaction, remain outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the number of Warrant Shares then exercisable under this Warrant, be exercisable for the kind and number of shares of stock or other securities or assets of the Company
6
or of the successor Person resulting from such transaction to which the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale, or similar transaction if the Holder had exercised this Warrant in full immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale, or similar transaction and acquired the applicable number of Warrant Shares then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant); and, in such case, appropriate adjustment (in form and substance satisfactory to the Holder) shall be made with respect to the Holder’s rights under this Warrant to insure that the provisions of Section 4 shall thereafter be applicable, as nearly as possible, to this Warrant in relation to any shares of stock, securities, or assets thereafter acquirable upon exercise of this Warrant (including, in the case of any consolidation, merger, sale, or similar transaction in which the successor or purchasing Person is other than the Company, an immediate adjustment in the Exercise Price to the value per share for the Common Stock reflected by the terms of such consolidation, merger, sale, or similar transaction, and a corresponding immediate adjustment to the number of Warrant Shares acquirable upon exercise of this Warrant without regard to any limitations or restrictions on exercise, if the value so reflected is less than the Exercise Price in effect immediately prior to such consolidation, merger, sale, or similar transaction). The provisions of this Section 4(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, or similar transactions. The Company shall not effect any such reorganization, reclassification, consolidation, merger, sale, or similar transaction unless, prior to the consummation thereof, the successor Person (if other than the Company) resulting from such reorganization, reclassification, consolidation, merger, sale, or similar transaction, shall assume, by written instrument substantially similar in form and substance to this Warrant and satisfactory to the Holder, the obligation to deliver to the Holder such shares of stock, securities, or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of this Warrant. Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 4(b), the Holder shall have the right to elect prior to the consummation of such event or transaction, to give effect to the exercise rights contained in Section 2 instead of giving effect to the provisions contained in this Section 4(b) with respect to this Warrant.
4.3.
Certificate as to Adjustment.
4.3.1.
As promptly as reasonably practicable following any adjustment of the Exercise Price, but in any event not later than 10 Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof.
4.3.2.
As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later than 10 Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the Exercise Price then in effect and the number of Warrant Shares or the amount, if any, of other shares of stock, securities, or assets then issuable upon exercise of the Warrant.
4.4.
Notices. In the event:
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4.4.1.
that the Company shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon exercise of the Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, to vote at a meeting (or by written consent), to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or
4.4.2.
of any capital reorganization of the Company, any reclassification of the Common Stock of the Company, any consolidation or merger of the Company with or into another Person, or any sale of all or substantially all of the Company’s assets to another Person; or
4.4.3.
of the voluntary or involuntary dissolution, liquidation, or winding-up of the Company;
then, and in each such case, the Company shall send or cause to be sent to the Holder at least 10 days prior to the applicable record date or the applicable expected effective date, as the case may be, for the event, a written notice specifying, as the case may be, (A) the record date for such dividend, distribution, meeting or consent, or other right or action, and a description of such dividend, distribution, or other right or action to be taken at such meeting or by written consent, or (B) the effective date on which such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding-up is proposed to take place, and the date, if any is to be fixed, as of which the books of the Company shall close or a record shall be taken with respect to which holders of record of Common Stock (or such other capital stock or securities at the time issuable upon exercise of the Warrant) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding-up, and the amount per share and character of such exchange applicable to the Warrant and the Warrant Shares.
5.
Purchase Rights. In addition to any adjustments pursuant to Section 4 above, if at any time the Company grants, issues, or sells any shares of Common Stock, Options, Convertible Securities, or rights to purchase stock, warrants, securities, or other property pro rata to the record holders of Common Stock (the “Purchase Rights”), then the Holder shall be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder would have acquired if the Holder had held the number of Warrant Shares acquirable upon complete exercise of this Warrant immediately before the date on which a record is taken for the grant, issuance, or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue, or sale of such Purchase Rights. Anything herein to the contrary notwithstanding, the Holder shall not be entitled to the Purchase Rights granted herein with respect to any Excluded Issuance.
6.
Transfer of Warrant. Subject to the transfer conditions referred to in the legend endorsed hereon, this Warrant and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed Assignment in the form attached hereto as Exhibit B, together with funds sufficient to pay any transfer taxes described in Section 3(f)(iv) in connection with the making of such transfer. Upon such compliance, surrender,
8
and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.
7.
Holder Not Deemed a Stockholder; Limitations on Liability. Except as otherwise specifically provided herein, prior to the issuance to the Holder of Warrant Shares in accordance with Section 3(c), the Holder shall not be entitled to vote or receive dividends with respect to, or be deemed the holder of, such Warrant Shares for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give, or withhold consent to any corporate action (whether any reorganization, issuance of stock, reclassification of stock, consolidation, merger, conveyance, or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
8.
Replacement on Loss; Division and Combination.
8.1.
Replacement of Warrant on Loss. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement or affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated, or destroyed; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.
8.2.
Division and Combination of Warrant. Subject to compliance with the applicable provisions of this Warrant as to any transfer or other assignment which may be involved in such division or combination, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject to compliance with the applicable provisions of this Warrant as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.
9.
No Impairment. The Company shall not, by amendment of its Certificate of Incorporation or Bylaws, 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
9
observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order to protect the exercise rights of the Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant.
10.
Compliance with the Securities Act.
10.1.
Agreement to Comply with the Securities Act; Legend. The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 10 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell, or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”). This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:
“THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF, EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS, OR (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.”
10.2.
Representations of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:
10.2.1.
The Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.
10.2.2.
The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
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10.2.3.
The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects, and financial condition of the Company.
11.
Warrant Register. The Company shall keep and properly maintain at its principal executive offices books for the registration of the Warrant and any transfers thereof. The Company may deem and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division, combination, or other transfer of the Warrant effected in accordance with the provisions of this Warrant.
12.
Notices. All notices, requests, consents, claims, demands, waivers, and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by email of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12).
If to the Company: |
DynaResource, Inc. 222 W. Las Colinas Blvd. Suite 1910 North Tower Las Colinas / Irving, TX 75039 Email: rhazelton@dynaresource.com Attention: Rohan Hazelton
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If to the Holder: |
Golden Post Rail, LLC Westlake, TX 76262
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With a copy to: |
Haynes and Boone, LLP 2801 N. Harwood Street, Suite 2300 Dallas, TX 75201 Email: matt.fry@haynesboone.com Attention: Matthew L. Fry
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13.
Cumulative Remedies. Except to the extent expressly provided in Section 7 to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.
14.
Equitable Relief. Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction.
15.
Entire Agreement. This Warrant, together with the Purchase Agreement and the other documents delivered pursuant thereto, constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Warrant and the statements in the Purchase Agreement, the statements in the Purchase Agreement shall control.
16.
Successor and Assigns. This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Such successors and permitted assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.
17.
No Third-Party Beneficiaries. This Warrant is for the sole benefit of the Company and the Holder and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever, under or by reason of this Warrant.
18.
Interpretation. For purposes of this Warrant and unless the context otherwise requires, (a) the words “include”, “includes”, and “including” are deemed to be followed by the words “without limitation”, (b) the word “or” is not exclusive, and (c) the words “herein”, “hereof”, “hereby”, “hereto”, and “hereunder” refer to this Warrant as a whole. All references to “$” mean the lawful currency of the United States of America. Whenever the singular is used in this Warrant, the same shall include the plural, and whenever the plural is used herein, the same shall include the singular, where appropriate. The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.
19.
Amendment and Modification; Waiver. Except as otherwise provided herein, this Warrant may only be amended, modified, or supplemented by an agreement in writing signed by each party hereto. No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach, or default not expressly identified by such written waiver, whether of a similar or different character, and whether
12
occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
20.
Severability. If any term or provision of this Warrant is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.
21.
Governing Law. This Warrant shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware.
22.
Submission to Jurisdiction. Any legal suit, action, or proceeding arising out of or based upon this Warrant or the transactions contemplated hereby may be instituted in the federal courts of the United States or the courts of the State of Delaware, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, or proceeding. Service of process, summons, notice, or other document by certified or registered mail to such party’s address set forth herein shall be effective service of process for any suit, action, or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action, or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum.
23.
Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.
24.
Counterparts. This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, e-mail, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.
25.
No Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.
[signature page follows]
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IN WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.
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DynaResource, Inc., a Delaware corporation
|
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By: /s/ Rohan Hazelton |
Accepted and agreed,
|
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GOLDEN POST RAIL, LLC
|
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By: /s/Matthew K. Rose |
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14
WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF, EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS, OR (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.
Warrant Certificate No.: 2
Original Issue Date: September 1, 2026
FOR VALUE RECEIVED, DynaResource, Inc., a Delaware corporation (the “Company”), hereby certifies that Ocean Partners UK Limited, a UK corporation, or its registered assigns (the “Holder”) is entitled to purchase from the Company 1,891,667 duly authorized, validly issued, fully paid, and nonassessable shares of Common Stock at a purchase price per share of $0.51 (subject to adjustment as provided herein, the “Exercise Price”), all subject to the terms, conditions, and adjustments set forth below in this Warrant. Certain capitalized terms used herein are defined in Section 1 hereof.
This Warrant has been issued pursuant to the terms of the Securities Purchase Agreement of even date herewith (the “Purchase Agreement”), between the Company and the Holder.
1.
Definitions. As used in this Warrant, the following terms have the respective meanings set forth below:
“Aggregate Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price in effect as of the Exercise Date in accordance with the terms of this Warrant.
“Authorized Shares Condition” means the approval by the requisite stockholders of the Company at a duly called meeting or by written consent of an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the authorized shares of Common Stock or effect a reverse stock split to accommodate the exercise of this Warrant to purchase the Warrant Shares in accordance with the terms of this Warrant (taking into account all issued and outstanding shares of Common Stock and all shares of Common Stock required to be reserved under all (a) outstanding Convertible Securities and Options, (b) outstanding equity awards, and (c) Company equity incentive plans and the filing of such amendment with the Delaware Secretary of State.
“Board” means the board of directors of the Company.
“Business Day” means any day, except a Saturday, Sunday, or legal holiday on which banking institutions in the city of Dallas, Texas are authorized or obligated by law or executive order to close.
“Common Stock” means the common stock, par value $0.01 per share, of the Company, and any capital stock into which such Common Stock shall have been converted, exchanged, or reclassified following the date hereof.
“Company” has the meaning set forth in the preamble.
“Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options.
“Excluded Issuances” means any issuance or sale (or deemed issuance or sale in accordance with Section 4(d)) by the Company after the Original Issue Date of: (a) shares of Common Stock issued upon the exercise of this Warrant; (b) shares of Common Stock (as such number of shares is equitably adjusted for subsequent stock splits, stock combinations, stock dividends, and recapitalizations) issued directly or upon the exercise of Options to directors, officers, employees, or consultants of the Company in connection with their service as directors of the Company, their employment by the Company, or their retention as consultants by the Company, in each case authorized by the Board and issued pursuant to the Company’s 2024 Amended and Restated Equity Incentive Plan (including all such shares of Common Stock and Options outstanding prior to the Original Issue Date); (c) shares of Common Stock issued upon the conversion or exercise of Options (other than Options covered by clause (b) above) or Convertible Securities issued prior to the Original Issue Date, provided that such securities are not amended after the date hereof to increase the number of shares of Common Stock issuable thereunder or to lower the exercise or conversion price thereof; (d) shares of Common Stock, Options, or Convertible Securities issued (i) to Persons in connection with a joint venture, strategic alliance, or other commercial relationship with such Person (including Persons that are customers, suppliers, and strategic partners of the Company) relating to the operation of the Company’s business and not for the primary purpose of raising equity capital, (ii) in connection with a transaction in which the Company, directly or indirectly, acquires another business or its tangible or intangible assets, or (iii) to lenders as equity kickers in connection with debt financings of the Company, in each case where such transactions have been approved by the Board; or (e) shares of Common Stock in an offering for cash for the account of the Company that is underwritten on a firm commitment basis and is registered with the Securities and Exchange Commission under the Securities Act.
“Exercise Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall have been satisfied at or prior to 5:00 p.m., Central time, on a Business Day, including the receipt by the Company of the Exercise Notice, the Warrant, and the Aggregate Exercise Price.
“Exercise Notice” has the meaning set forth in Section 3(a)(i).
“Exercise Period” has the meaning set forth in Section 2.
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“Exercise Price” has the meaning set forth in the preamble.
“Fair Market Value” means, as of any particular date: (a) the volume weighted average of the closing sales prices of the Common Stock for such day on all domestic securities exchanges on which the Common Stock may at the time be listed; (b) if there have been no sales of the Common Stock on any such exchange on any such day, the average of the highest bid and lowest ask prices for the Common Stock on all such exchanges at the end of such day; (c) if on any such day the Common Stock is not listed on a domestic securities exchange, the closing sales price of the Common Stock as quoted on the OTC Markets or similar quotation system or association for such day; or (d) if there have been no sales of the Common Stock on the OTC Markets or similar quotation system or association on such day, the average of the highest bid and lowest ask prices for the Common Stock quoted on the OTC Markets or similar quotation system or association at the end of such day; in each case, averaged over twenty (20) consecutive Business Days ending on the Business Day immediately prior to the day as of which “Fair Market Value” is being determined; provided, that if the Common Stock is listed on any domestic securities exchange, the term “Business Day” as used in this sentence means Business Days on which such exchange is open for trading. If at any time the Common Stock is not listed on any domestic securities exchange or quoted on the OTC Markets or similar quotation system or association, the “Fair Market Value” of the Common Stock shall be the fair market value per share as determined jointly by the Board and the Holder; provided, that if the Board and the Holder are unable to agree on the fair market value per share of the Common Stock within a reasonable period of time (not to exceed 30 days from the Company’s receipt of the Exercise Notice), such fair market value shall be determined by a nationally recognized investment banking, accounting, or valuation firm engaged by the Company. The determination of such firm shall be final and conclusive, and the fees and expenses of such valuation firm shall be borne by the Company.
“Holder” has the meaning set forth in the preamble.
“Options” means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities.
“Original Issue Date” means the Original Issue Date set forth above.
“OTC Markets” means the OTC Markets Group Inc. electronic inter-dealer quotation system, including OTCQX, OTCQB, OTCID, and Pink Limited.
“Person” means any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, incorporated organization, or government or department or agency thereof.
“Purchase Agreement” has the meaning set forth in the preamble.
“Securities Act” has the meaning set forth in Section 10(a).
“Warrant” means this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.
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“Warrant Shares” means the shares of Common Stock or other capital stock of the Company then purchasable upon exercise of this Warrant in accordance with the terms of this Warrant.
2.
Exercise Period. Subject to the terms and conditions hereof, at any time and from time to time during the period commencing on the date the Authorized Shares Condition is satisfied and continuing until 5:00 p.m., Central time, on the later of (a) 180 days following the Original Issue Date, and (b) 30 days following the date the Authorized Shares Condition is satisfied, or, if such day is not a Business Day, on the next succeeding Business Day (the “Exercise Period”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein).
3.
Exercise of Warrant.
3.1.
Exercise Procedure. This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares, upon:
3.1.1.
surrender of this Warrant to the Company at its then principal executive offices, together with an Exercise Notice in the form attached hereto as Exhibit A (each, an “Exercise Notice”), duly completed (including specifying the number of Warrant Shares to be purchased) and executed; and
3.1.2.
payment to the Company of the Aggregate Exercise Price in accordance with Section 3(b).
3.2.
Payment of the Aggregate Exercise Price. Payment of the Aggregate Exercise Price shall be made by delivery to the Company of a certified or official bank check payable to the order of the Company or by wire transfer of immediately available funds to an account designated in writing by the Company, in the amount of such Aggregate Exercise Price.
3.3.
Delivery of Stock Certificates. Upon receipt by the Company of the Exercise Notice, surrender of this Warrant, and payment of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in any event within three (3) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise, or, at the Company’s election, deliver (or cause to be delivered) to the Holder evidence of such Warrant Shares having been credited to the Holder’s account in book-entry form on the books of the Company or its transfer agent, together with cash in lieu of any fraction of a share, as provided in Section 3(d)hereof. The stock certificate or certificates or book-entry shares so delivered shall be registered in the name of the Holder or, subject to compliance with Section 6 below, such other Person’s name as shall be designated in the Exercise Notice. This Warrant shall be deemed to have been exercised and such certificate or certificates of Warrant Shares or book-entry shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the Exercise Date.
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3.4.
Fractional Shares. The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant. As to any fraction of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of (i) such fraction multiplied by (ii) the Fair Market Value of one Warrant Share on the Exercise Date.
3.5.
Delivery of New Warrant. Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued in accordance with Section 3(c) hereof, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant.
3.6.
Valid Issuance of Warrant and Warrant Shares; Payment of Taxes. With respect to the exercise of this Warrant, the Company hereby represents, covenants, and agrees:
3.6.1.
This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.
3.6.2.
All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid, and non-assessable, issued without violation of any preemptive or similar rights of any stockholder of the Company and free and clear of all taxes, liens, and charges.
3.6.3.
The Company shall take all such actions as may be necessary to ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).
3.6.4.
The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder, and no such issuance or delivery shall be made unless and until the Person requesting such issuance has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid.
3.7.
Conditional Exercise. Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company (pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case
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such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.
3.8.
Reservation of Shares. During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Exercise Price. The Company shall not increase the par value of any Warrant Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.
4.
Adjustment to Exercise Price and Number of Warrant Shares. In order to prevent dilution of the purchase rights granted under this Warrant, the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 4 (in each case, after taking into consideration any prior adjustments pursuant to this Section 4).
4.1.
Adjustment to Exercise Price and Warrant Shares Upon Dividend, Subdivision or Combination of Common Stock. If the Company shall, at any time or from time to time after the Original Issue Date, (i) pay a dividend or make any other distribution upon the Common Stock or any other capital stock of the Company payable in shares of Common Stock or in Options or Convertible Securities, or (ii) subdivide (by any stock split, recapitalization, or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to any such dividend, distribution, or subdivision shall be proportionately reduced and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately increased. If the Company at any time combines (by combination, reverse stock split, or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately decreased. Any adjustment under this Section 4(a) shall become effective at the close of business on the date the dividend, subdivision, or combination becomes effective.
4.2.
Adjustment to Exercise Price and Warrant Shares Upon Reorganization, Reclassification, Consolidation, or Merger. In the event of any (i) capital reorganization of the Company, (ii) reclassification of the stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split-up, or combination of shares), (iii) consolidation or merger of the Company with or into another Person, (iv) sale of all or substantially all of the Company’s assets to another Person or (v) other similar transaction (other than any such transaction covered by Section 4(a)), in each case which entitles the holders of Common Stock to receive (either directly or upon subsequent liquidation) stock, securities, or assets with respect to or in exchange for Common Stock, each Warrant shall, immediately after such reorganization, reclassification, consolidation, merger, sale, or similar transaction, remain outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the number of Warrant Shares then exercisable under this Warrant, be exercisable for the kind and number of shares of stock or other securities or assets of the Company
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or of the successor Person resulting from such transaction to which the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale, or similar transaction if the Holder had exercised this Warrant in full immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale, or similar transaction and acquired the applicable number of Warrant Shares then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant); and, in such case, appropriate adjustment (in form and substance satisfactory to the Holder) shall be made with respect to the Holder’s rights under this Warrant to insure that the provisions of Section 4 shall thereafter be applicable, as nearly as possible, to this Warrant in relation to any shares of stock, securities, or assets thereafter acquirable upon exercise of this Warrant (including, in the case of any consolidation, merger, sale, or similar transaction in which the successor or purchasing Person is other than the Company, an immediate adjustment in the Exercise Price to the value per share for the Common Stock reflected by the terms of such consolidation, merger, sale, or similar transaction, and a corresponding immediate adjustment to the number of Warrant Shares acquirable upon exercise of this Warrant without regard to any limitations or restrictions on exercise, if the value so reflected is less than the Exercise Price in effect immediately prior to such consolidation, merger, sale, or similar transaction). The provisions of this Section 4(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, or similar transactions. The Company shall not effect any such reorganization, reclassification, consolidation, merger, sale, or similar transaction unless, prior to the consummation thereof, the successor Person (if other than the Company) resulting from such reorganization, reclassification, consolidation, merger, sale, or similar transaction, shall assume, by written instrument substantially similar in form and substance to this Warrant and satisfactory to the Holder, the obligation to deliver to the Holder such shares of stock, securities, or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of this Warrant. Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 4(b), the Holder shall have the right to elect prior to the consummation of such event or transaction, to give effect to the exercise rights contained in Section 2 instead of giving effect to the provisions contained in this Section 4(b) with respect to this Warrant.
4.3.
Certificate as to Adjustment.
4.3.1.
As promptly as reasonably practicable following any adjustment of the Exercise Price, but in any event not later than 10 Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof.
4.3.2.
As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later than 10 Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the Exercise Price then in effect and the number of Warrant Shares or the amount, if any, of other shares of stock, securities, or assets then issuable upon exercise of the Warrant.
4.4.
Notices. In the event:
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4.4.1.
that the Company shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon exercise of the Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, to vote at a meeting (or by written consent), to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or
4.4.2.
of any capital reorganization of the Company, any reclassification of the Common Stock of the Company, any consolidation or merger of the Company with or into another Person, or any sale of all or substantially all of the Company’s assets to another Person; or
4.4.3.
of the voluntary or involuntary dissolution, liquidation, or winding-up of the Company;
then, and in each such case, the Company shall send or cause to be sent to the Holder at least 10 days prior to the applicable record date or the applicable expected effective date, as the case may be, for the event, a written notice specifying, as the case may be, (A) the record date for such dividend, distribution, meeting or consent, or other right or action, and a description of such dividend, distribution, or other right or action to be taken at such meeting or by written consent, or (B) the effective date on which such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding-up is proposed to take place, and the date, if any is to be fixed, as of which the books of the Company shall close or a record shall be taken with respect to which holders of record of Common Stock (or such other capital stock or securities at the time issuable upon exercise of the Warrant) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding-up, and the amount per share and character of such exchange applicable to the Warrant and the Warrant Shares.
5.
Purchase Rights. In addition to any adjustments pursuant to Section 4 above, if at any time the Company grants, issues, or sells any shares of Common Stock, Options, Convertible Securities, or rights to purchase stock, warrants, securities, or other property pro rata to the record holders of Common Stock (the “Purchase Rights”), then the Holder shall be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder would have acquired if the Holder had held the number of Warrant Shares acquirable upon complete exercise of this Warrant immediately before the date on which a record is taken for the grant, issuance, or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue, or sale of such Purchase Rights. Anything herein to the contrary notwithstanding, the Holder shall not be entitled to the Purchase Rights granted herein with respect to any Excluded Issuance.
6.
Transfer of Warrant. Subject to the transfer conditions referred to in the legend endorsed hereon, this Warrant and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed Assignment in the form attached hereto as Exhibit B, together with funds sufficient to pay any transfer taxes described in Section 3(f)(iv) in connection with the making of such transfer. Upon such compliance, surrender,
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and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.
7.
Holder Not Deemed a Stockholder; Limitations on Liability. Except as otherwise specifically provided herein, prior to the issuance to the Holder of Warrant Shares in accordance with Section 3(c), the Holder shall not be entitled to vote or receive dividends with respect to, or be deemed the holder of, such Warrant Shares for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give, or withhold consent to any corporate action (whether any reorganization, issuance of stock, reclassification of stock, consolidation, merger, conveyance, or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
8.
Replacement on Loss; Division and Combination.
8.1.
Replacement of Warrant on Loss. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement or affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated, or destroyed; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.
8.2.
Division and Combination of Warrant. Subject to compliance with the applicable provisions of this Warrant as to any transfer or other assignment which may be involved in such division or combination, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject to compliance with the applicable provisions of this Warrant as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.
9.
No Impairment. The Company shall not, by amendment of its Certificate of Incorporation or Bylaws, 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
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observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order to protect the exercise rights of the Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant.
10.
Compliance with the Securities Act.
10.1.
Agreement to Comply with the Securities Act; Legend. The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 10 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell, or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”). This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:
“THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF, EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS, OR (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.”
10.2.
Representations of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:
10.2.1.
The Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.
10.2.2.
The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
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10.2.3.
The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects, and financial condition of the Company.
11.
Warrant Register. The Company shall keep and properly maintain at its principal executive offices books for the registration of the Warrant and any transfers thereof. The Company may deem and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division, combination, or other transfer of the Warrant effected in accordance with the provisions of this Warrant.
12.
Notices. All notices, requests, consents, claims, demands, waivers, and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by email of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12).
If to the Company: |
DynaResource, Inc. 222 W. Las Colinas Blvd. Suite 1910 North Tower Las Colinas / Irving, TX 75039 Email: rhazelton@dynaresource.com Attention: Rohan Hazelton
|
If to the Holder: |
Ocean Partners UK Limited Maidenhead, Berkshire, UK SL6 1RL |
13.
Cumulative Remedies. Except to the extent expressly provided in Section 7 to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.
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14.
Equitable Relief. Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction.
15.
Entire Agreement. This Warrant, together with the Purchase Agreement and the other documents delivered pursuant thereto, constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Warrant and the statements in the Purchase Agreement, the statements in the Purchase Agreement shall control.
16.
Successor and Assigns. This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Such successors and permitted assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.
17.
No Third-Party Beneficiaries. This Warrant is for the sole benefit of the Company and the Holder and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever, under or by reason of this Warrant.
18.
Interpretation. For purposes of this Warrant and unless the context otherwise requires, (a) the words “include”, “includes”, and “including” are deemed to be followed by the words “without limitation”, (b) the word “or” is not exclusive, and (c) the words “herein”, “hereof”, “hereby”, “hereto”, and “hereunder” refer to this Warrant as a whole. All references to “$” mean the lawful currency of the United States of America. Whenever the singular is used in this Warrant, the same shall include the plural, and whenever the plural is used herein, the same shall include the singular, where appropriate. The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.
19.
Amendment and Modification; Waiver. Except as otherwise provided herein, this Warrant may only be amended, modified, or supplemented by an agreement in writing signed by each party hereto. No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach, or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
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20.
Severability. If any term or provision of this Warrant is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.
21.
Governing Law. This Warrant shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware.
22.
Submission to Jurisdiction. Any legal suit, action, or proceeding arising out of or based upon this Warrant or the transactions contemplated hereby may be instituted in the federal courts of the United States or the courts of the State of Delaware, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, or proceeding. Service of process, summons, notice, or other document by certified or registered mail to such party’s address set forth herein shall be effective service of process for any suit, action, or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action, or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum.
23.
Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.
24.
Counterparts. This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, e-mail, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.
25.
No Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.
[signature page follows]
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IN WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.
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DynaResource, Inc., a Delaware corporation
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By: /s/ Rohan Hazelton |
Accepted and agreed,
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OCEAN PARTNERS UK LIMITED
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By: /s/ Neil Poulter |
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WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF, EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS, OR (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.
Warrant Certificate No.: 3
Original Issue Date: September 1, 2026
FOR VALUE RECEIVED, DynaResource, Inc., a Delaware corporation (the “Company”), hereby certifies that Gareth Nichol, or his registered assigns (the “Holder”) is entitled to purchase from the Company 2,000,000 duly authorized, validly issued, fully paid, and nonassessable shares of Common Stock at a purchase price per share of $0.51 (subject to adjustment as provided herein, the “Exercise Price”), all subject to the terms, conditions, and adjustments set forth below in this Warrant. Certain capitalized terms used herein are defined in Section 1 hereof.
This Warrant has been issued pursuant to the terms of the Securities Purchase Agreement of even date herewith (the “Purchase Agreement”), between the Company and the Holder.
1.
Definitions. As used in this Warrant, the following terms have the respective meanings set forth below:
“Aggregate Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price in effect as of the Exercise Date in accordance with the terms of this Warrant.
“Authorized Shares Condition” means the approval by the requisite stockholders of the Company at a duly called meeting or by written consent of an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the authorized shares of Common Stock or effect a reverse stock split to accommodate the exercise of this Warrant to purchase the Warrant Shares in accordance with the terms of this Warrant (taking into account all issued and outstanding shares of Common Stock and all shares of Common Stock required to be reserved under all (a) outstanding Convertible Securities and Options, (b) outstanding equity awards, and (c) Company equity incentive plans and the filing of such amendment with the Delaware Secretary of State.
“Board” means the board of directors of the Company.
“Business Day” means any day, except a Saturday, Sunday, or legal holiday on which banking institutions in the city of Dallas, Texas are authorized or obligated by law or executive order to close.
“Common Stock” means the common stock, par value $0.01 per share, of the Company, and any capital stock into which such Common Stock shall have been converted, exchanged, or reclassified following the date hereof.
“Company” has the meaning set forth in the preamble.
“Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options.
“Excluded Issuances” means any issuance or sale (or deemed issuance or sale in accordance with Section 4(d)) by the Company after the Original Issue Date of: (a) shares of Common Stock issued upon the exercise of this Warrant; (b) shares of Common Stock (as such number of shares is equitably adjusted for subsequent stock splits, stock combinations, stock dividends, and recapitalizations) issued directly or upon the exercise of Options to directors, officers, employees, or consultants of the Company in connection with their service as directors of the Company, their employment by the Company, or their retention as consultants by the Company, in each case authorized by the Board and issued pursuant to the Company’s 2024 Amended and Restated Equity Incentive Plan (including all such shares of Common Stock and Options outstanding prior to the Original Issue Date); (c) shares of Common Stock issued upon the conversion or exercise of Options (other than Options covered by clause (b) above) or Convertible Securities issued prior to the Original Issue Date, provided that such securities are not amended after the date hereof to increase the number of shares of Common Stock issuable thereunder or to lower the exercise or conversion price thereof; (d) shares of Common Stock, Options, or Convertible Securities issued (i) to Persons in connection with a joint venture, strategic alliance, or other commercial relationship with such Person (including Persons that are customers, suppliers, and strategic partners of the Company) relating to the operation of the Company’s business and not for the primary purpose of raising equity capital, (ii) in connection with a transaction in which the Company, directly or indirectly, acquires another business or its tangible or intangible assets, or (iii) to lenders as equity kickers in connection with debt financings of the Company, in each case where such transactions have been approved by the Board; or (e) shares of Common Stock in an offering for cash for the account of the Company that is underwritten on a firm commitment basis and is registered with the Securities and Exchange Commission under the Securities Act.
“Exercise Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall have been satisfied at or prior to 5:00 p.m., Central time, on a Business Day, including the receipt by the Company of the Exercise Notice, the Warrant, and the Aggregate Exercise Price.
“Exercise Notice” has the meaning set forth in Section 3(a)(i).
“Exercise Period” has the meaning set forth in Section 2.
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“Exercise Price” has the meaning set forth in the preamble.
“Fair Market Value” means, as of any particular date: (a) the volume weighted average of the closing sales prices of the Common Stock for such day on all domestic securities exchanges on which the Common Stock may at the time be listed; (b) if there have been no sales of the Common Stock on any such exchange on any such day, the average of the highest bid and lowest ask prices for the Common Stock on all such exchanges at the end of such day; (c) if on any such day the Common Stock is not listed on a domestic securities exchange, the closing sales price of the Common Stock as quoted on the OTC Markets or similar quotation system or association for such day; or (d) if there have been no sales of the Common Stock on the OTC Markets or similar quotation system or association on such day, the average of the highest bid and lowest ask prices for the Common Stock quoted on the OTC Markets or similar quotation system or association at the end of such day; in each case, averaged over twenty (20) consecutive Business Days ending on the Business Day immediately prior to the day as of which “Fair Market Value” is being determined; provided, that if the Common Stock is listed on any domestic securities exchange, the term “Business Day” as used in this sentence means Business Days on which such exchange is open for trading. If at any time the Common Stock is not listed on any domestic securities exchange or quoted on the OTC Markets or similar quotation system or association, the “Fair Market Value” of the Common Stock shall be the fair market value per share as determined jointly by the Board and the Holder; provided, that if the Board and the Holder are unable to agree on the fair market value per share of the Common Stock within a reasonable period of time (not to exceed 30 days from the Company’s receipt of the Exercise Notice), such fair market value shall be determined by a nationally recognized investment banking, accounting, or valuation firm engaged by the Company. The determination of such firm shall be final and conclusive, and the fees and expenses of such valuation firm shall be borne by the Company.
“Holder” has the meaning set forth in the preamble.
“Options” means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities.
“Original Issue Date” means the Original Issue Date set forth above.
“OTC Markets” means the OTC Markets Group Inc. electronic inter-dealer quotation system, including OTCQX, OTCQB, OTCID, and Pink Limited.
“Person” means any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, incorporated organization, or government or department or agency thereof.
“Purchase Agreement” has the meaning set forth in the preamble.
“Securities Act” has the meaning set forth in Section 10(a).
“Warrant” means this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.
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“Warrant Shares” means the shares of Common Stock or other capital stock of the Company then purchasable upon exercise of this Warrant in accordance with the terms of this Warrant.
2.
Exercise Period. Subject to the terms and conditions hereof, at any time and from time to time during the period commencing on the date the Authorized Shares Condition is satisfied and continuing until 5:00 p.m., Central time, on the later of (a) 180 days following the Original Issue Date, and (b) 30 days following the date the Authorized Shares Condition is satisfied, or, if such day is not a Business Day, on the next succeeding Business Day (the “Exercise Period”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein).
3.
Exercise of Warrant.
3.1.
Exercise Procedure. This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares, upon:
3.1.1.
surrender of this Warrant to the Company at its then principal executive offices, together with an Exercise Notice in the form attached hereto as Exhibit A (each, an “Exercise Notice”), duly completed (including specifying the number of Warrant Shares to be purchased) and executed; and
3.1.2.
payment to the Company of the Aggregate Exercise Price in accordance with Section 3(b).
3.2.
Payment of the Aggregate Exercise Price. Payment of the Aggregate Exercise Price shall be made by delivery to the Company of a certified or official bank check payable to the order of the Company or by wire transfer of immediately available funds to an account designated in writing by the Company, in the amount of such Aggregate Exercise Price.
3.3.
Delivery of Stock Certificates. Upon receipt by the Company of the Exercise Notice, surrender of this Warrant, and payment of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in any event within three (3) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise, or, at the Company’s election, deliver (or cause to be delivered) to the Holder evidence of such Warrant Shares having been credited to the Holder’s account in book-entry form on the books of the Company or its transfer agent, together with cash in lieu of any fraction of a share, as provided in Section 3(d)hereof. The stock certificate or certificates or book-entry shares so delivered shall be registered in the name of the Holder or, subject to compliance with Section 6 below, such other Person’s name as shall be designated in the Exercise Notice. This Warrant shall be deemed to have been exercised and such certificate or certificates of Warrant Shares or book-entry shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the Exercise Date.
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3.4.
Fractional Shares. The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant. As to any fraction of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of (i) such fraction multiplied by (ii) the Fair Market Value of one Warrant Share on the Exercise Date.
3.5.
Delivery of New Warrant. Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued in accordance with Section 3(c) hereof, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant.
3.6.
Valid Issuance of Warrant and Warrant Shares; Payment of Taxes. With respect to the exercise of this Warrant, the Company hereby represents, covenants, and agrees:
3.6.1.
This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.
3.6.2.
All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid, and non-assessable, issued without violation of any preemptive or similar rights of any stockholder of the Company and free and clear of all taxes, liens, and charges.
3.6.3.
The Company shall take all such actions as may be necessary to ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).
3.6.4.
The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder, and no such issuance or delivery shall be made unless and until the Person requesting such issuance has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid.
3.7.
Conditional Exercise. Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company (pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case
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such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.
3.8.
Reservation of Shares. During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Exercise Price. The Company shall not increase the par value of any Warrant Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.
4.
Adjustment to Exercise Price and Number of Warrant Shares. In order to prevent dilution of the purchase rights granted under this Warrant, the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 4 (in each case, after taking into consideration any prior adjustments pursuant to this Section 4).
4.1.
Adjustment to Exercise Price and Warrant Shares Upon Dividend, Subdivision or Combination of Common Stock. If the Company shall, at any time or from time to time after the Original Issue Date, (i) pay a dividend or make any other distribution upon the Common Stock or any other capital stock of the Company payable in shares of Common Stock or in Options or Convertible Securities, or (ii) subdivide (by any stock split, recapitalization, or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to any such dividend, distribution, or subdivision shall be proportionately reduced and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately increased. If the Company at any time combines (by combination, reverse stock split, or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately decreased. Any adjustment under this Section 4(a) shall become effective at the close of business on the date the dividend, subdivision, or combination becomes effective.
4.2.
Adjustment to Exercise Price and Warrant Shares Upon Reorganization, Reclassification, Consolidation, or Merger. In the event of any (i) capital reorganization of the Company, (ii) reclassification of the stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split-up, or combination of shares), (iii) consolidation or merger of the Company with or into another Person, (iv) sale of all or substantially all of the Company’s assets to another Person or (v) other similar transaction (other than any such transaction covered by Section 4(a)), in each case which entitles the holders of Common Stock to receive (either directly or upon subsequent liquidation) stock, securities, or assets with respect to or in exchange for Common Stock, each Warrant shall, immediately after such reorganization, reclassification, consolidation, merger, sale, or similar transaction, remain outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the number of Warrant Shares then exercisable under this Warrant, be exercisable for the kind and number of shares of stock or other securities or assets of the Company
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or of the successor Person resulting from such transaction to which the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale, or similar transaction if the Holder had exercised this Warrant in full immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale, or similar transaction and acquired the applicable number of Warrant Shares then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant); and, in such case, appropriate adjustment (in form and substance satisfactory to the Holder) shall be made with respect to the Holder’s rights under this Warrant to insure that the provisions of Section 4 shall thereafter be applicable, as nearly as possible, to this Warrant in relation to any shares of stock, securities, or assets thereafter acquirable upon exercise of this Warrant (including, in the case of any consolidation, merger, sale, or similar transaction in which the successor or purchasing Person is other than the Company, an immediate adjustment in the Exercise Price to the value per share for the Common Stock reflected by the terms of such consolidation, merger, sale, or similar transaction, and a corresponding immediate adjustment to the number of Warrant Shares acquirable upon exercise of this Warrant without regard to any limitations or restrictions on exercise, if the value so reflected is less than the Exercise Price in effect immediately prior to such consolidation, merger, sale, or similar transaction). The provisions of this Section 4(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, or similar transactions. The Company shall not effect any such reorganization, reclassification, consolidation, merger, sale, or similar transaction unless, prior to the consummation thereof, the successor Person (if other than the Company) resulting from such reorganization, reclassification, consolidation, merger, sale, or similar transaction, shall assume, by written instrument substantially similar in form and substance to this Warrant and satisfactory to the Holder, the obligation to deliver to the Holder such shares of stock, securities, or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of this Warrant. Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 4(b), the Holder shall have the right to elect prior to the consummation of such event or transaction, to give effect to the exercise rights contained in Section 2 instead of giving effect to the provisions contained in this Section 4(b) with respect to this Warrant.
4.3.
Certificate as to Adjustment.
4.3.1.
As promptly as reasonably practicable following any adjustment of the Exercise Price, but in any event not later than 10 Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof.
4.3.2.
As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later than 10 Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the Exercise Price then in effect and the number of Warrant Shares or the amount, if any, of other shares of stock, securities, or assets then issuable upon exercise of the Warrant.
4.4.
Notices. In the event:
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4.4.1.
that the Company shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon exercise of the Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, to vote at a meeting (or by written consent), to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or
4.4.2.
of any capital reorganization of the Company, any reclassification of the Common Stock of the Company, any consolidation or merger of the Company with or into another Person, or any sale of all or substantially all of the Company’s assets to another Person; or
4.4.3.
of the voluntary or involuntary dissolution, liquidation, or winding-up of the Company;
then, and in each such case, the Company shall send or cause to be sent to the Holder at least 10 days prior to the applicable record date or the applicable expected effective date, as the case may be, for the event, a written notice specifying, as the case may be, (A) the record date for such dividend, distribution, meeting or consent, or other right or action, and a description of such dividend, distribution, or other right or action to be taken at such meeting or by written consent, or (B) the effective date on which such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding-up is proposed to take place, and the date, if any is to be fixed, as of which the books of the Company shall close or a record shall be taken with respect to which holders of record of Common Stock (or such other capital stock or securities at the time issuable upon exercise of the Warrant) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding-up, and the amount per share and character of such exchange applicable to the Warrant and the Warrant Shares.
5.
Purchase Rights. In addition to any adjustments pursuant to Section 4 above, if at any time the Company grants, issues, or sells any shares of Common Stock, Options, Convertible Securities, or rights to purchase stock, warrants, securities, or other property pro rata to the record holders of Common Stock (the “Purchase Rights”), then the Holder shall be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder would have acquired if the Holder had held the number of Warrant Shares acquirable upon complete exercise of this Warrant immediately before the date on which a record is taken for the grant, issuance, or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue, or sale of such Purchase Rights. Anything herein to the contrary notwithstanding, the Holder shall not be entitled to the Purchase Rights granted herein with respect to any Excluded Issuance.
6.
Transfer of Warrant. Subject to the transfer conditions referred to in the legend endorsed hereon, this Warrant and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed Assignment in the form attached hereto as Exhibit B, together with funds sufficient to pay any transfer taxes described in Section 3(f)(iv) in connection with the making of such transfer. Upon such compliance, surrender,
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and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.
7.
Holder Not Deemed a Stockholder; Limitations on Liability. Except as otherwise specifically provided herein, prior to the issuance to the Holder of Warrant Shares in accordance with Section 3(c), the Holder shall not be entitled to vote or receive dividends with respect to, or be deemed the holder of, such Warrant Shares for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give, or withhold consent to any corporate action (whether any reorganization, issuance of stock, reclassification of stock, consolidation, merger, conveyance, or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
8.
Replacement on Loss; Division and Combination.
8.1.
Replacement of Warrant on Loss. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement or affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated, or destroyed; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.
8.2.
Division and Combination of Warrant. Subject to compliance with the applicable provisions of this Warrant as to any transfer or other assignment which may be involved in such division or combination, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject to compliance with the applicable provisions of this Warrant as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.
9.
No Impairment. The Company shall not, by amendment of its Certificate of Incorporation or Bylaws, 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
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observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order to protect the exercise rights of the Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant.
10.
Compliance with the Securities Act.
10.1.
Agreement to Comply with the Securities Act; Legend. The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 10 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell, or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”). This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:
“THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF, EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS, OR (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.”
10.2.
Representations of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:
10.2.1.
The Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.
10.2.2.
The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
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10.2.3.
The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects, and financial condition of the Company.
11.
Warrant Register. The Company shall keep and properly maintain at its principal executive offices books for the registration of the Warrant and any transfers thereof. The Company may deem and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division, combination, or other transfer of the Warrant effected in accordance with the provisions of this Warrant.
12.
Notices. All notices, requests, consents, claims, demands, waivers, and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by email of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12).
If to the Company: |
DynaResource, Inc. 222 W. Las Colinas Blvd. Suite 1910 North Tower Las Colinas / Irving, TX 75039 Email: rhazelton@dynaresource.com Attention: Rohan Hazelton
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If to the Holder: |
Gareth Nichol Greenwood Village, CO 80111 |
13.
Cumulative Remedies. Except to the extent expressly provided in 97 to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.
14.
Equitable Relief. Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate
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remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction.
15.
Entire Agreement. This Warrant, together with the Purchase Agreement and the other documents delivered pursuant thereto, constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Warrant and the statements in the Purchase Agreement, the statements in the Purchase Agreement shall control.
16.
Successor and Assigns. This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Such successors and permitted assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.
17.
No Third-Party Beneficiaries. This Warrant is for the sole benefit of the Company and the Holder and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever, under or by reason of this Warrant.
18.
Interpretation. For purposes of this Warrant and unless the context otherwise requires, (a) the words “include”, “includes”, and “including” are deemed to be followed by the words “without limitation”, (b) the word “or” is not exclusive, and (c) the words “herein”, “hereof”, “hereby”, “hereto”, and “hereunder” refer to this Warrant as a whole. All references to “$” mean the lawful currency of the United States of America. Whenever the singular is used in this Warrant, the same shall include the plural, and whenever the plural is used herein, the same shall include the singular, where appropriate. The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.
19.
Amendment and Modification; Waiver. Except as otherwise provided herein, this Warrant may only be amended, modified, or supplemented by an agreement in writing signed by each party hereto. No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach, or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
20.
Severability. If any term or provision of this Warrant is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect
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any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.
21.
Governing Law. This Warrant shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware.
22.
Submission to Jurisdiction. Any legal suit, action, or proceeding arising out of or based upon this Warrant or the transactions contemplated hereby may be instituted in the federal courts of the United States or the courts of the State of Delaware, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, or proceeding. Service of process, summons, notice, or other document by certified or registered mail to such party’s address set forth herein shall be effective service of process for any suit, action, or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action, or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum.
23.
Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.
24.
Counterparts. This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, e-mail, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.
25.
No Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.
[signature page follows]
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IN WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.
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DynaResource, Inc., a Delaware corporation
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By: /s/ Rohan Hazelton |
Accepted and agreed,
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/s/ Gareth Nichol |
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WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF, EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS, OR (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.
Warrant Certificate No.: 4
Original Issue Date: September 1, 2026
FOR VALUE RECEIVED, DynaResource, Inc., a Delaware corporation (the “Company”), hereby certifies that Jay Redlingshafer, or his registered assigns (the “Holder”) is entitled to purchase from the Company 444,444 duly authorized, validly issued, fully paid, and nonassessable shares of Common Stock at a purchase price per share of $0.51 (subject to adjustment as provided herein, the “Exercise Price”), all subject to the terms, conditions, and adjustments set forth below in this Warrant. Certain capitalized terms used herein are defined in Section 1 hereof.
This Warrant has been issued pursuant to the terms of the Securities Purchase Agreement of even date herewith (the “Purchase Agreement”), between the Company and the Holder.
1.
Definitions. As used in this Warrant, the following terms have the respective meanings set forth below:
“Aggregate Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price in effect as of the Exercise Date in accordance with the terms of this Warrant.
“Authorized Shares Condition” means the approval by the requisite stockholders of the Company at a duly called meeting or by written consent of an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the authorized shares of Common Stock or effect a reverse stock split to accommodate the exercise of this Warrant to purchase the Warrant Shares in accordance with the terms of this Warrant (taking into account all issued and outstanding shares of Common Stock and all shares of Common Stock required to be reserved under all (a) outstanding Convertible Securities and Options, (b) outstanding equity awards, and (c) Company equity incentive plans and the filing of such amendment with the Delaware Secretary of State.
“Board” means the board of directors of the Company.
“Business Day” means any day, except a Saturday, Sunday, or legal holiday on which banking institutions in the city of Dallas, Texas are authorized or obligated by law or executive order to close.
“Common Stock” means the common stock, par value $0.01 per share, of the Company, and any capital stock into which such Common Stock shall have been converted, exchanged, or reclassified following the date hereof.
“Company” has the meaning set forth in the preamble.
“Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options.
“Excluded Issuances” means any issuance or sale (or deemed issuance or sale in accordance with Section 4(d)) by the Company after the Original Issue Date of: (a) shares of Common Stock issued upon the exercise of this Warrant; (b) shares of Common Stock (as such number of shares is equitably adjusted for subsequent stock splits, stock combinations, stock dividends, and recapitalizations) issued directly or upon the exercise of Options to directors, officers, employees, or consultants of the Company in connection with their service as directors of the Company, their employment by the Company, or their retention as consultants by the Company, in each case authorized by the Board and issued pursuant to the Company’s 2024 Amended and Restated Equity Incentive Plan (including all such shares of Common Stock and Options outstanding prior to the Original Issue Date); (c) shares of Common Stock issued upon the conversion or exercise of Options (other than Options covered by clause (b) above) or Convertible Securities issued prior to the Original Issue Date, provided that such securities are not amended after the date hereof to increase the number of shares of Common Stock issuable thereunder or to lower the exercise or conversion price thereof; (d) shares of Common Stock, Options, or Convertible Securities issued (i) to Persons in connection with a joint venture, strategic alliance, or other commercial relationship with such Person (including Persons that are customers, suppliers, and strategic partners of the Company) relating to the operation of the Company’s business and not for the primary purpose of raising equity capital, (ii) in connection with a transaction in which the Company, directly or indirectly, acquires another business or its tangible or intangible assets, or (iii) to lenders as equity kickers in connection with debt financings of the Company, in each case where such transactions have been approved by the Board; or (e) shares of Common Stock in an offering for cash for the account of the Company that is underwritten on a firm commitment basis and is registered with the Securities and Exchange Commission under the Securities Act.
“Exercise Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall have been satisfied at or prior to 5:00 p.m., Central time, on a Business Day, including the receipt by the Company of the Exercise Notice, the Warrant, and the Aggregate Exercise Price.
“Exercise Notice” has the meaning set forth in Section 3(a)(i).
“Exercise Period” has the meaning set forth in Section 2.
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“Exercise Price” has the meaning set forth in the preamble.
“Fair Market Value” means, as of any particular date: (a) the volume weighted average of the closing sales prices of the Common Stock for such day on all domestic securities exchanges on which the Common Stock may at the time be listed; (b) if there have been no sales of the Common Stock on any such exchange on any such day, the average of the highest bid and lowest ask prices for the Common Stock on all such exchanges at the end of such day; (c) if on any such day the Common Stock is not listed on a domestic securities exchange, the closing sales price of the Common Stock as quoted on the OTC Markets or similar quotation system or association for such day; or (d) if there have been no sales of the Common Stock on the OTC Markets or similar quotation system or association on such day, the average of the highest bid and lowest ask prices for the Common Stock quoted on the OTC Markets or similar quotation system or association at the end of such day; in each case, averaged over twenty (20) consecutive Business Days ending on the Business Day immediately prior to the day as of which “Fair Market Value” is being determined; provided, that if the Common Stock is listed on any domestic securities exchange, the term “Business Day” as used in this sentence means Business Days on which such exchange is open for trading. If at any time the Common Stock is not listed on any domestic securities exchange or quoted on the OTC Markets or similar quotation system or association, the “Fair Market Value” of the Common Stock shall be the fair market value per share as determined jointly by the Board and the Holder; provided, that if the Board and the Holder are unable to agree on the fair market value per share of the Common Stock within a reasonable period of time (not to exceed 30 days from the Company’s receipt of the Exercise Notice), such fair market value shall be determined by a nationally recognized investment banking, accounting, or valuation firm engaged by the Company. The determination of such firm shall be final and conclusive, and the fees and expenses of such valuation firm shall be borne by the Company.
“Holder” has the meaning set forth in the preamble.
“Options” means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities.
“Original Issue Date” means the Original Issue Date set forth above.
“OTC Markets” means the OTC Markets Group Inc. electronic inter-dealer quotation system, including OTCQX, OTCQB, OTCID, and Pink Limited.
“Person” means any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, incorporated organization, or government or department or agency thereof.
“Purchase Agreement” has the meaning set forth in the preamble.
“Securities Act” has the meaning set forth in Section 10(a).
“Warrant” means this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.
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“Warrant Shares” means the shares of Common Stock or other capital stock of the Company then purchasable upon exercise of this Warrant in accordance with the terms of this Warrant.
2.
Exercise Period. Subject to the terms and conditions hereof, at any time and from time to time during the period commencing on the date the Authorized Shares Condition is satisfied and continuing until 5:00 p.m., Central time, on the later of (a) 180 days following the Original Issue Date, and (b) 30 days following the date the Authorized Shares Condition is satisfied, or, if such day is not a Business Day, on the next succeeding Business Day (the “Exercise Period”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein).
3.
Exercise of Warrant.
3.1.
Exercise Procedure. This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares, upon:
3.1.1.
surrender of this Warrant to the Company at its then principal executive offices, together with an Exercise Notice in the form attached hereto as Exhibit A (each, an “Exercise Notice”), duly completed (including specifying the number of Warrant Shares to be purchased) and executed; and
3.1.2.
payment to the Company of the Aggregate Exercise Price in accordance with Section 3(b).
3.2.
Payment of the Aggregate Exercise Price. Payment of the Aggregate Exercise Price shall be made by delivery to the Company of a certified or official bank check payable to the order of the Company or by wire transfer of immediately available funds to an account designated in writing by the Company, in the amount of such Aggregate Exercise Price.
3.3.
Delivery of Stock Certificates. Upon receipt by the Company of the Exercise Notice, surrender of this Warrant, and payment of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in any event within three (3) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise, or, at the Company’s election, deliver (or cause to be delivered) to the Holder evidence of such Warrant Shares having been credited to the Holder’s account in book-entry form on the books of the Company or its transfer agent, together with cash in lieu of any fraction of a share, as provided in Section 3(d)hereof. The stock certificate or certificates or book-entry shares so delivered shall be registered in the name of the Holder or, subject to compliance with Section 6 below, such other Person’s name as shall be designated in the Exercise Notice. This Warrant shall be deemed to have been exercised and such certificate or certificates of Warrant Shares or book-entry shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the Exercise Date.
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3.4.
Fractional Shares. The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant. As to any fraction of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of (i) such fraction multiplied by (ii) the Fair Market Value of one Warrant Share on the Exercise Date.
3.5.
Delivery of New Warrant. Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued in accordance with Section 3(c) hereof, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant.
3.6.
Valid Issuance of Warrant and Warrant Shares; Payment of Taxes. With respect to the exercise of this Warrant, the Company hereby represents, covenants, and agrees:
3.6.1.
This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.
3.6.2.
All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid, and non-assessable, issued without violation of any preemptive or similar rights of any stockholder of the Company and free and clear of all taxes, liens, and charges.
3.6.3.
The Company shall take all such actions as may be necessary to ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).
3.6.4.
The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder, and no such issuance or delivery shall be made unless and until the Person requesting such issuance has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid.
3.7.
Conditional Exercise. Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company (pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case
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such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.
3.8.
Reservation of Shares. During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Exercise Price. The Company shall not increase the par value of any Warrant Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.
4.
Adjustment to Exercise Price and Number of Warrant Shares. In order to prevent dilution of the purchase rights granted under this Warrant, the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 4 (in each case, after taking into consideration any prior adjustments pursuant to this Section 4).
4.1.
Adjustment to Exercise Price and Warrant Shares Upon Dividend, Subdivision or Combination of Common Stock. If the Company shall, at any time or from time to time after the Original Issue Date, (i) pay a dividend or make any other distribution upon the Common Stock or any other capital stock of the Company payable in shares of Common Stock or in Options or Convertible Securities, or (ii) subdivide (by any stock split, recapitalization, or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to any such dividend, distribution, or subdivision shall be proportionately reduced and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately increased. If the Company at any time combines (by combination, reverse stock split, or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately decreased. Any adjustment under this Section 4(a) shall become effective at the close of business on the date the dividend, subdivision, or combination becomes effective.
4.2.
Adjustment to Exercise Price and Warrant Shares Upon Reorganization, Reclassification, Consolidation, or Merger. In the event of any (i) capital reorganization of the Company, (ii) reclassification of the stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split-up, or combination of shares), (iii) consolidation or merger of the Company with or into another Person, (iv) sale of all or substantially all of the Company’s assets to another Person or (v) other similar transaction (other than any such transaction covered by Section 4(a)), in each case which entitles the holders of Common Stock to receive (either directly or upon subsequent liquidation) stock, securities, or assets with respect to or in exchange for Common Stock, each Warrant shall, immediately after such reorganization, reclassification, consolidation, merger, sale, or similar transaction, remain outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the number of Warrant Shares then exercisable under this Warrant, be exercisable for the kind and number of shares of stock or other securities or assets of the Company
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or of the successor Person resulting from such transaction to which the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale, or similar transaction if the Holder had exercised this Warrant in full immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale, or similar transaction and acquired the applicable number of Warrant Shares then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant); and, in such case, appropriate adjustment (in form and substance satisfactory to the Holder) shall be made with respect to the Holder’s rights under this Warrant to insure that the provisions of Section 4 shall thereafter be applicable, as nearly as possible, to this Warrant in relation to any shares of stock, securities, or assets thereafter acquirable upon exercise of this Warrant (including, in the case of any consolidation, merger, sale, or similar transaction in which the successor or purchasing Person is other than the Company, an immediate adjustment in the Exercise Price to the value per share for the Common Stock reflected by the terms of such consolidation, merger, sale, or similar transaction, and a corresponding immediate adjustment to the number of Warrant Shares acquirable upon exercise of this Warrant without regard to any limitations or restrictions on exercise, if the value so reflected is less than the Exercise Price in effect immediately prior to such consolidation, merger, sale, or similar transaction). The provisions of this Section 4(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, or similar transactions. The Company shall not effect any such reorganization, reclassification, consolidation, merger, sale, or similar transaction unless, prior to the consummation thereof, the successor Person (if other than the Company) resulting from such reorganization, reclassification, consolidation, merger, sale, or similar transaction, shall assume, by written instrument substantially similar in form and substance to this Warrant and satisfactory to the Holder, the obligation to deliver to the Holder such shares of stock, securities, or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of this Warrant. Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 4(b), the Holder shall have the right to elect prior to the consummation of such event or transaction, to give effect to the exercise rights contained in Section 2 instead of giving effect to the provisions contained in this Section 4(b) with respect to this Warrant.
4.3.
Certificate as to Adjustment.
4.3.1.
As promptly as reasonably practicable following any adjustment of the Exercise Price, but in any event not later than 10 Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof.
4.3.2.
As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later than 10 Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the Exercise Price then in effect and the number of Warrant Shares or the amount, if any, of other shares of stock, securities, or assets then issuable upon exercise of the Warrant.
4.4.
Notices. In the event:
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4.4.1.
that the Company shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon exercise of the Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, to vote at a meeting (or by written consent), to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or
4.4.2.
of any capital reorganization of the Company, any reclassification of the Common Stock of the Company, any consolidation or merger of the Company with or into another Person, or any sale of all or substantially all of the Company’s assets to another Person; or
4.4.3.
of the voluntary or involuntary dissolution, liquidation, or winding-up of the Company;
then, and in each such case, the Company shall send or cause to be sent to the Holder at least 10 days prior to the applicable record date or the applicable expected effective date, as the case may be, for the event, a written notice specifying, as the case may be, (A) the record date for such dividend, distribution, meeting or consent, or other right or action, and a description of such dividend, distribution, or other right or action to be taken at such meeting or by written consent, or (B) the effective date on which such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding-up is proposed to take place, and the date, if any is to be fixed, as of which the books of the Company shall close or a record shall be taken with respect to which holders of record of Common Stock (or such other capital stock or securities at the time issuable upon exercise of the Warrant) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding-up, and the amount per share and character of such exchange applicable to the Warrant and the Warrant Shares.
5.
Purchase Rights. In addition to any adjustments pursuant to Section 4 above, if at any time the Company grants, issues, or sells any shares of Common Stock, Options, Convertible Securities, or rights to purchase stock, warrants, securities, or other property pro rata to the record holders of Common Stock (the “Purchase Rights”), then the Holder shall be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder would have acquired if the Holder had held the number of Warrant Shares acquirable upon complete exercise of this Warrant immediately before the date on which a record is taken for the grant, issuance, or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue, or sale of such Purchase Rights. Anything herein to the contrary notwithstanding, the Holder shall not be entitled to the Purchase Rights granted herein with respect to any Excluded Issuance.
6.
Transfer of Warrant. Subject to the transfer conditions referred to in the legend endorsed hereon, this Warrant and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed Assignment in the form attached hereto as Exhibit B, together with funds sufficient to pay any transfer taxes described in Section 3(f)(iv) in connection with the making of such transfer. Upon such compliance, surrender,
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and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.
7.
Holder Not Deemed a Stockholder; Limitations on Liability. Except as otherwise specifically provided herein, prior to the issuance to the Holder of Warrant Shares in accordance with Section 3(c), the Holder shall not be entitled to vote or receive dividends with respect to, or be deemed the holder of, such Warrant Shares for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give, or withhold consent to any corporate action (whether any reorganization, issuance of stock, reclassification of stock, consolidation, merger, conveyance, or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
8.
Replacement on Loss; Division and Combination.
8.1.
Replacement of Warrant on Loss. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement or affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated, or destroyed; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.
8.2.
Division and Combination of Warrant. Subject to compliance with the applicable provisions of this Warrant as to any transfer or other assignment which may be involved in such division or combination, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject to compliance with the applicable provisions of this Warrant as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.
9.
No Impairment. The Company shall not, by amendment of its Certificate of Incorporation or Bylaws, 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
9
observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order to protect the exercise rights of the Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant.
10.
Compliance with the Securities Act.
10.1.
Agreement to Comply with the Securities Act; Legend. The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 10 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell, or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”). This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:
“THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF, EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS, OR (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.”
10.2.
Representations of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:
10.2.1.
The Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.
10.2.2.
The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
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10.2.3.
The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects, and financial condition of the Company.
11.
Warrant Register. The Company shall keep and properly maintain at its principal executive offices books for the registration of the Warrant and any transfers thereof. The Company may deem and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division, combination, or other transfer of the Warrant effected in accordance with the provisions of this Warrant.
12.
Notices. All notices, requests, consents, claims, demands, waivers, and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by email of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12).
If to the Company: |
DynaResource, Inc. 222 W. Las Colinas Blvd. Suite 1910 North Tower Las Colinas / Irving, TX 75039 Email: rhazelton@dynaresource.com Attention: Rohan Hazelton
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If to the Holder: |
Jay Redlingshafer Ladue, MO 63124 |
13.
Cumulative Remedies. Except to the extent expressly provided in Section 7 to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.
14.
Equitable Relief. Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate
11
remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction.
15.
Entire Agreement. This Warrant, together with the Purchase Agreement and the other documents delivered pursuant thereto, constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Warrant and the statements in the Purchase Agreement, the statements in the Purchase Agreement shall control.
16.
Successor and Assigns. This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Such successors and permitted assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.
17.
No Third-Party Beneficiaries. This Warrant is for the sole benefit of the Company and the Holder and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever, under or by reason of this Warrant.
18.
Interpretation. For purposes of this Warrant and unless the context otherwise requires, (a) the words “include”, “includes”, and “including” are deemed to be followed by the words “without limitation”, (b) the word “or” is not exclusive, and (c) the words “herein”, “hereof”, “hereby”, “hereto”, and “hereunder” refer to this Warrant as a whole. All references to “$” mean the lawful currency of the United States of America. Whenever the singular is used in this Warrant, the same shall include the plural, and whenever the plural is used herein, the same shall include the singular, where appropriate. The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.
19.
Amendment and Modification; Waiver. Except as otherwise provided herein, this Warrant may only be amended, modified, or supplemented by an agreement in writing signed by each party hereto. No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach, or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
20.
Severability. If any term or provision of this Warrant is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect
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any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.
21.
Governing Law. This Warrant shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware.
22.
Submission to Jurisdiction. Any legal suit, action, or proceeding arising out of or based upon this Warrant or the transactions contemplated hereby may be instituted in the federal courts of the United States or the courts of the State of Delaware, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, or proceeding. Service of process, summons, notice, or other document by certified or registered mail to such party’s address set forth herein shall be effective service of process for any suit, action, or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action, or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum.
23.
Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.
24.
Counterparts. This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, e-mail, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.
25.
No Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.
[signature page follows]
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IN WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.
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DynaResource, Inc., a Delaware corporation
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By: /s/ Rohan Hazelton |
Accepted and agreed,
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/s/ Jay Redlingshafer |
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WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF, EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS, OR (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.
Warrant Certificate No.: 5
Original Issue Date: September 1, 2026
FOR VALUE RECEIVED, DynaResource, Inc., a Delaware corporation (the “Company”), hereby certifies that Smith First Family L.P., a Texas limited partnership, or its registered assigns (the “Holder”) is entitled to purchase from the Company 44,444 duly authorized, validly issued, fully paid, and nonassessable shares of Common Stock at a purchase price per share of $0.51 (subject to adjustment as provided herein, the “Exercise Price”), all subject to the terms, conditions, and adjustments set forth below in this Warrant. Certain capitalized terms used herein are defined in Section 1 hereof.
This Warrant has been issued pursuant to the terms of the Securities Purchase Agreement of even date herewith (the “Purchase Agreement”), between the Company and the Holder.
1.
Definitions. As used in this Warrant, the following terms have the respective meanings set forth below:
“Aggregate Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price in effect as of the Exercise Date in accordance with the terms of this Warrant.
“Authorized Shares Condition” means the approval by the requisite stockholders of the Company at a duly called meeting or by written consent of an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the authorized shares of Common Stock or effect a reverse stock split to accommodate the exercise of this Warrant to purchase the Warrant Shares in accordance with the terms of this Warrant (taking into account all issued and outstanding shares of Common Stock and all shares of Common Stock required to be reserved under all (a) outstanding Convertible Securities and Options, (b) outstanding equity awards, and (c) Company equity incentive plans and the filing of such amendment with the Delaware Secretary of State.
“Board” means the board of directors of the Company.
“Business Day” means any day, except a Saturday, Sunday, or legal holiday on which banking institutions in the city of Dallas, Texas are authorized or obligated by law or executive order to close.
“Common Stock” means the common stock, par value $0.01 per share, of the Company, and any capital stock into which such Common Stock shall have been converted, exchanged, or reclassified following the date hereof.
“Company” has the meaning set forth in the preamble.
“Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options.
“Excluded Issuances” means any issuance or sale (or deemed issuance or sale in accordance with Section 4(d)) by the Company after the Original Issue Date of: (a) shares of Common Stock issued upon the exercise of this Warrant; (b) shares of Common Stock (as such number of shares is equitably adjusted for subsequent stock splits, stock combinations, stock dividends, and recapitalizations) issued directly or upon the exercise of Options to directors, officers, employees, or consultants of the Company in connection with their service as directors of the Company, their employment by the Company, or their retention as consultants by the Company, in each case authorized by the Board and issued pursuant to the Company’s 2024 Amended and Restated Equity Incentive Plan (including all such shares of Common Stock and Options outstanding prior to the Original Issue Date); (c) shares of Common Stock issued upon the conversion or exercise of Options (other than Options covered by clause (b) above) or Convertible Securities issued prior to the Original Issue Date, provided that such securities are not amended after the date hereof to increase the number of shares of Common Stock issuable thereunder or to lower the exercise or conversion price thereof; (d) shares of Common Stock, Options, or Convertible Securities issued (i) to Persons in connection with a joint venture, strategic alliance, or other commercial relationship with such Person (including Persons that are customers, suppliers, and strategic partners of the Company) relating to the operation of the Company’s business and not for the primary purpose of raising equity capital, (ii) in connection with a transaction in which the Company, directly or indirectly, acquires another business or its tangible or intangible assets, or (iii) to lenders as equity kickers in connection with debt financings of the Company, in each case where such transactions have been approved by the Board; or (e) shares of Common Stock in an offering for cash for the account of the Company that is underwritten on a firm commitment basis and is registered with the Securities and Exchange Commission under the Securities Act.
“Exercise Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall have been satisfied at or prior to 5:00 p.m., Central time, on a Business Day, including the receipt by the Company of the Exercise Notice, the Warrant, and the Aggregate Exercise Price.
“Exercise Notice” has the meaning set forth in Section 3(a)(i).
“Exercise Period” has the meaning set forth in Section 2.
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“Exercise Price” has the meaning set forth in the preamble.
“Fair Market Value” means, as of any particular date: (a) the volume weighted average of the closing sales prices of the Common Stock for such day on all domestic securities exchanges on which the Common Stock may at the time be listed; (b) if there have been no sales of the Common Stock on any such exchange on any such day, the average of the highest bid and lowest ask prices for the Common Stock on all such exchanges at the end of such day; (c) if on any such day the Common Stock is not listed on a domestic securities exchange, the closing sales price of the Common Stock as quoted on the OTC Markets or similar quotation system or association for such day; or (d) if there have been no sales of the Common Stock on the OTC Markets or similar quotation system or association on such day, the average of the highest bid and lowest ask prices for the Common Stock quoted on the OTC Markets or similar quotation system or association at the end of such day; in each case, averaged over twenty (20) consecutive Business Days ending on the Business Day immediately prior to the day as of which “Fair Market Value” is being determined; provided, that if the Common Stock is listed on any domestic securities exchange, the term “Business Day” as used in this sentence means Business Days on which such exchange is open for trading. If at any time the Common Stock is not listed on any domestic securities exchange or quoted on the OTC Markets or similar quotation system or association, the “Fair Market Value” of the Common Stock shall be the fair market value per share as determined jointly by the Board and the Holder; provided, that if the Board and the Holder are unable to agree on the fair market value per share of the Common Stock within a reasonable period of time (not to exceed 30 days from the Company’s receipt of the Exercise Notice), such fair market value shall be determined by a nationally recognized investment banking, accounting, or valuation firm engaged by the Company. The determination of such firm shall be final and conclusive, and the fees and expenses of such valuation firm shall be borne by the Company.
“Holder” has the meaning set forth in the preamble.
“Options” means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities.
“Original Issue Date” means the Original Issue Date set forth above.
“OTC Markets” means the OTC Markets Group Inc. electronic inter-dealer quotation system, including OTCQX, OTCQB, OTCID, and Pink Limited.
“Person” means any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, incorporated organization, or government or department or agency thereof.
“Purchase Agreement” has the meaning set forth in the preamble.
“Securities Act” has the meaning set forth in Section 10(a).
“Warrant” means this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.
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“Warrant Shares” means the shares of Common Stock or other capital stock of the Company then purchasable upon exercise of this Warrant in accordance with the terms of this Warrant.
2.
Exercise Period. Subject to the terms and conditions hereof, at any time and from time to time during the period commencing on the date the Authorized Shares Condition is satisfied and continuing until 5:00 p.m., Central time, on the later of (a) 180 days following the Original Issue Date, and (b) 30 days following the date the Authorized Shares Condition is satisfied, or, if such day is not a Business Day, on the next succeeding Business Day (the “Exercise Period”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein).
3.
Exercise of Warrant.
3.1.
Exercise Procedure. This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares, upon:
3.1.1.
surrender of this Warrant to the Company at its then principal executive offices, together with an Exercise Notice in the form attached hereto as Exhibit A (each, an “Exercise Notice”), duly completed (including specifying the number of Warrant Shares to be purchased) and executed; and
3.1.2.
payment to the Company of the Aggregate Exercise Price in accordance with Section 3(b).
3.2.
Payment of the Aggregate Exercise Price. Payment of the Aggregate Exercise Price shall be made by delivery to the Company of a certified or official bank check payable to the order of the Company or by wire transfer of immediately available funds to an account designated in writing by the Company, in the amount of such Aggregate Exercise Price.
3.3.
Delivery of Stock Certificates. Upon receipt by the Company of the Exercise Notice, surrender of this Warrant, and payment of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in any event within three (3) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise, or, at the Company’s election, deliver (or cause to be delivered) to the Holder evidence of such Warrant Shares having been credited to the Holder’s account in book-entry form on the books of the Company or its transfer agent, together with cash in lieu of any fraction of a share, as provided in Section 3(d)hereof. The stock certificate or certificates or book-entry shares so delivered shall be registered in the name of the Holder or, subject to compliance with Section 6 below, such other Person’s name as shall be designated in the Exercise Notice. This Warrant shall be deemed to have been exercised and such certificate or certificates of Warrant Shares or book-entry shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the Exercise Date.
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3.4.
Fractional Shares. The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant. As to any fraction of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of (i) such fraction multiplied by (ii) the Fair Market Value of one Warrant Share on the Exercise Date.
3.5.
Delivery of New Warrant. Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued in accordance with Section 3(c) hereof, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant.
3.6.
Valid Issuance of Warrant and Warrant Shares; Payment of Taxes. With respect to the exercise of this Warrant, the Company hereby represents, covenants, and agrees:
3.6.1.
This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.
3.6.2.
All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid, and non-assessable, issued without violation of any preemptive or similar rights of any stockholder of the Company and free and clear of all taxes, liens, and charges.
3.6.3.
The Company shall take all such actions as may be necessary to ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).
3.6.4.
The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder, and no such issuance or delivery shall be made unless and until the Person requesting such issuance has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid.
3.7.
Conditional Exercise. Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company (pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case
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such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.
3.8.
Reservation of Shares. During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Exercise Price. The Company shall not increase the par value of any Warrant Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.
4.
Adjustment to Exercise Price and Number of Warrant Shares. In order to prevent dilution of the purchase rights granted under this Warrant, the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 4 (in each case, after taking into consideration any prior adjustments pursuant to this Section 4).
4.1.
Adjustment to Exercise Price and Warrant Shares Upon Dividend, Subdivision or Combination of Common Stock. If the Company shall, at any time or from time to time after the Original Issue Date, (i) pay a dividend or make any other distribution upon the Common Stock or any other capital stock of the Company payable in shares of Common Stock or in Options or Convertible Securities, or (ii) subdivide (by any stock split, recapitalization, or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to any such dividend, distribution, or subdivision shall be proportionately reduced and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately increased. If the Company at any time combines (by combination, reverse stock split, or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately decreased. Any adjustment under this Section 4(a) shall become effective at the close of business on the date the dividend, subdivision, or combination becomes effective.
4.2.
Adjustment to Exercise Price and Warrant Shares Upon Reorganization, Reclassification, Consolidation, or Merger. In the event of any (i) capital reorganization of the Company, (ii) reclassification of the stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split-up, or combination of shares), (iii) consolidation or merger of the Company with or into another Person, (iv) sale of all or substantially all of the Company’s assets to another Person or (v) other similar transaction (other than any such transaction covered by Section 4(a)), in each case which entitles the holders of Common Stock to receive (either directly or upon subsequent liquidation) stock, securities, or assets with respect to or in exchange for Common Stock, each Warrant shall, immediately after such reorganization, reclassification, consolidation, merger, sale, or similar transaction, remain outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the number of Warrant Shares then exercisable under this Warrant, be exercisable for the kind and number of shares of stock or other securities or assets of the Company
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or of the successor Person resulting from such transaction to which the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale, or similar transaction if the Holder had exercised this Warrant in full immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale, or similar transaction and acquired the applicable number of Warrant Shares then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant); and, in such case, appropriate adjustment (in form and substance satisfactory to the Holder) shall be made with respect to the Holder’s rights under this Warrant to insure that the provisions of Section 4 shall thereafter be applicable, as nearly as possible, to this Warrant in relation to any shares of stock, securities, or assets thereafter acquirable upon exercise of this Warrant (including, in the case of any consolidation, merger, sale, or similar transaction in which the successor or purchasing Person is other than the Company, an immediate adjustment in the Exercise Price to the value per share for the Common Stock reflected by the terms of such consolidation, merger, sale, or similar transaction, and a corresponding immediate adjustment to the number of Warrant Shares acquirable upon exercise of this Warrant without regard to any limitations or restrictions on exercise, if the value so reflected is less than the Exercise Price in effect immediately prior to such consolidation, merger, sale, or similar transaction). The provisions of this Section 4(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, or similar transactions. The Company shall not effect any such reorganization, reclassification, consolidation, merger, sale, or similar transaction unless, prior to the consummation thereof, the successor Person (if other than the Company) resulting from such reorganization, reclassification, consolidation, merger, sale, or similar transaction, shall assume, by written instrument substantially similar in form and substance to this Warrant and satisfactory to the Holder, the obligation to deliver to the Holder such shares of stock, securities, or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of this Warrant. Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 4(b), the Holder shall have the right to elect prior to the consummation of such event or transaction, to give effect to the exercise rights contained in Section 2 instead of giving effect to the provisions contained in this Section 4(b) with respect to this Warrant.
4.3.
Certificate as to Adjustment.
4.3.1.
As promptly as reasonably practicable following any adjustment of the Exercise Price, but in any event not later than 10 Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof.
4.3.2.
As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later than 10 Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the Exercise Price then in effect and the number of Warrant Shares or the amount, if any, of other shares of stock, securities, or assets then issuable upon exercise of the Warrant.
4.4.
Notices. In the event:
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4.4.1.
that the Company shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon exercise of the Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, to vote at a meeting (or by written consent), to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or
4.4.2.
of any capital reorganization of the Company, any reclassification of the Common Stock of the Company, any consolidation or merger of the Company with or into another Person, or any sale of all or substantially all of the Company’s assets to another Person; or
4.4.3.
of the voluntary or involuntary dissolution, liquidation, or winding-up of the Company;
then, and in each such case, the Company shall send or cause to be sent to the Holder at least 10 days prior to the applicable record date or the applicable expected effective date, as the case may be, for the event, a written notice specifying, as the case may be, (A) the record date for such dividend, distribution, meeting or consent, or other right or action, and a description of such dividend, distribution, or other right or action to be taken at such meeting or by written consent, or (B) the effective date on which such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding-up is proposed to take place, and the date, if any is to be fixed, as of which the books of the Company shall close or a record shall be taken with respect to which holders of record of Common Stock (or such other capital stock or securities at the time issuable upon exercise of the Warrant) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding-up, and the amount per share and character of such exchange applicable to the Warrant and the Warrant Shares.
5.
Purchase Rights. In addition to any adjustments pursuant to Section 4 above, if at any time the Company grants, issues, or sells any shares of Common Stock, Options, Convertible Securities, or rights to purchase stock, warrants, securities, or other property pro rata to the record holders of Common Stock (the “Purchase Rights”), then the Holder shall be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder would have acquired if the Holder had held the number of Warrant Shares acquirable upon complete exercise of this Warrant immediately before the date on which a record is taken for the grant, issuance, or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue, or sale of such Purchase Rights. Anything herein to the contrary notwithstanding, the Holder shall not be entitled to the Purchase Rights granted herein with respect to any Excluded Issuance.
6.
Transfer of Warrant. Subject to the transfer conditions referred to in the legend endorsed hereon, this Warrant and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed Assignment in the form attached hereto as Exhibit B, together with funds sufficient to pay any transfer taxes described in Section 3(f)(iv) in connection with the making of such transfer. Upon such compliance, surrender,
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and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.
7.
Holder Not Deemed a Stockholder; Limitations on Liability. Except as otherwise specifically provided herein, prior to the issuance to the Holder of Warrant Shares in accordance with Section 3(c), the Holder shall not be entitled to vote or receive dividends with respect to, or be deemed the holder of, such Warrant Shares for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give, or withhold consent to any corporate action (whether any reorganization, issuance of stock, reclassification of stock, consolidation, merger, conveyance, or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
8.
Replacement on Loss; Division and Combination.
8.1.
Replacement of Warrant on Loss. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement or affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated, or destroyed; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.
8.2.
Division and Combination of Warrant. Subject to compliance with the applicable provisions of this Warrant as to any transfer or other assignment which may be involved in such division or combination, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject to compliance with the applicable provisions of this Warrant as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.
9.
No Impairment. The Company shall not, by amendment of its Certificate of Incorporation or Bylaws, 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
9
observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order to protect the exercise rights of the Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant.
10.
Compliance with the Securities Act.
10.1.
Agreement to Comply with the Securities Act; Legend. The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 10 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell, or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”). This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:
“THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF, EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS, OR (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.”
10.2.
Representations of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:
10.2.1.
The Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.
10.2.2.
The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
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10.2.3.
The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects, and financial condition of the Company.
11.
Warrant Register. The Company shall keep and properly maintain at its principal executive offices books for the registration of the Warrant and any transfers thereof. The Company may deem and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division, combination, or other transfer of the Warrant effected in accordance with the provisions of this Warrant.
12.
Notices. All notices, requests, consents, claims, demands, waivers, and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by email of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12).
If to the Company: |
DynaResource, Inc. 222 W. Las Colinas Blvd. Suite 1910 North Tower Las Colinas / Irving, TX 75039 Email: rhazelton@dynaresource.com Attention: Rohan Hazelton
|
If to the Holder: |
Smith First Family L.P. Rockwall, TX 75087 Email: charlie@ck2advisors.com Attention: Charlie Smith |
13.
Cumulative Remedies. Except to the extent expressly provided in Section 7 to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.
14.
Equitable Relief. Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to
11
irreparable harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction.
15.
Entire Agreement. This Warrant, together with the Purchase Agreement and the other documents delivered pursuant thereto, constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Warrant and the statements in the Purchase Agreement, the statements in the Purchase Agreement shall control.
16.
Successor and Assigns. This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Such successors and permitted assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.
17.
No Third-Party Beneficiaries. This Warrant is for the sole benefit of the Company and the Holder and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever, under or by reason of this Warrant.
18.
Interpretation. For purposes of this Warrant and unless the context otherwise requires, (a) the words “include”, “includes”, and “including” are deemed to be followed by the words “without limitation”, (b) the word “or” is not exclusive, and (c) the words “herein”, “hereof”, “hereby”, “hereto”, and “hereunder” refer to this Warrant as a whole. All references to “$” mean the lawful currency of the United States of America. Whenever the singular is used in this Warrant, the same shall include the plural, and whenever the plural is used herein, the same shall include the singular, where appropriate. The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.
19.
Amendment and Modification; Waiver. Except as otherwise provided herein, this Warrant may only be amended, modified, or supplemented by an agreement in writing signed by each party hereto. No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach, or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
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20.
Severability. If any term or provision of this Warrant is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.
21.
Governing Law. This Warrant shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware.
22.
Submission to Jurisdiction. Any legal suit, action, or proceeding arising out of or based upon this Warrant or the transactions contemplated hereby may be instituted in the federal courts of the United States or the courts of the State of Delaware, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, or proceeding. Service of process, summons, notice, or other document by certified or registered mail to such party’s address set forth herein shall be effective service of process for any suit, action, or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action, or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum.
23.
Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.
24.
Counterparts. This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, e-mail, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.
25.
No Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.
[signature page follows]
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IN WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.
|
DynaResource, Inc., a Delaware corporation
|
|
By: /s/ Rohan Hazelton |
Accepted and agreed,
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Smith First Family L.P.
|
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By: /s/ Charlie Smith Title: General Partner |
|
14
WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF, EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS, OR (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.
Warrant Certificate No.: 6
Original Issue Date: September 1, 2026
FOR VALUE RECEIVED, DynaResource, Inc., a Delaware corporation (the “Company”), hereby certifies that Doug Metcalf, or his registered assigns (the “Holder”) is entitled to purchase from the Company 150,000 duly authorized, validly issued, fully paid, and nonassessable shares of Common Stock at a purchase price per share of $0.51 (subject to adjustment as provided herein, the “Exercise Price”), all subject to the terms, conditions, and adjustments set forth below in this Warrant. Certain capitalized terms used herein are defined in Section 1 hereof.
This Warrant has been issued pursuant to the terms of the Securities Purchase Agreement of even date herewith (the “Purchase Agreement”), between the Company and the Holder.
1.
Definitions. As used in this Warrant, the following terms have the respective meanings set forth below:
“Aggregate Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price in effect as of the Exercise Date in accordance with the terms of this Warrant.
“Authorized Shares Condition” means the approval by the requisite stockholders of the Company at a duly called meeting or by written consent of an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the authorized shares of Common Stock or effect a reverse stock split to accommodate the exercise of this Warrant to purchase the Warrant Shares in accordance with the terms of this Warrant (taking into account all issued and outstanding shares of Common Stock and all shares of Common Stock required to be reserved under all (a) outstanding Convertible Securities and Options, (b) outstanding equity awards, and (c) Company equity incentive plans and the filing of such amendment with the Delaware Secretary of State.
“Board” means the board of directors of the Company.
“Business Day” means any day, except a Saturday, Sunday, or legal holiday on which banking institutions in the city of Dallas, Texas are authorized or obligated by law or executive order to close.
“Common Stock” means the common stock, par value $0.01 per share, of the Company, and any capital stock into which such Common Stock shall have been converted, exchanged, or reclassified following the date hereof.
“Company” has the meaning set forth in the preamble.
“Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options.
“Excluded Issuances” means any issuance or sale (or deemed issuance or sale in accordance with Section 4(d)) by the Company after the Original Issue Date of: (a) shares of Common Stock issued upon the exercise of this Warrant; (b) shares of Common Stock (as such number of shares is equitably adjusted for subsequent stock splits, stock combinations, stock dividends, and recapitalizations) issued directly or upon the exercise of Options to directors, officers, employees, or consultants of the Company in connection with their service as directors of the Company, their employment by the Company, or their retention as consultants by the Company, in each case authorized by the Board and issued pursuant to the Company’s 2024 Amended and Restated Equity Incentive Plan (including all such shares of Common Stock and Options outstanding prior to the Original Issue Date); (c) shares of Common Stock issued upon the conversion or exercise of Options (other than Options covered by clause (b) above) or Convertible Securities issued prior to the Original Issue Date, provided that such securities are not amended after the date hereof to increase the number of shares of Common Stock issuable thereunder or to lower the exercise or conversion price thereof; (d) shares of Common Stock, Options, or Convertible Securities issued (i) to Persons in connection with a joint venture, strategic alliance, or other commercial relationship with such Person (including Persons that are customers, suppliers, and strategic partners of the Company) relating to the operation of the Company’s business and not for the primary purpose of raising equity capital, (ii) in connection with a transaction in which the Company, directly or indirectly, acquires another business or its tangible or intangible assets, or (iii) to lenders as equity kickers in connection with debt financings of the Company, in each case where such transactions have been approved by the Board; or (e) shares of Common Stock in an offering for cash for the account of the Company that is underwritten on a firm commitment basis and is registered with the Securities and Exchange Commission under the Securities Act.
“Exercise Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall have been satisfied at or prior to 5:00 p.m., Central time, on a Business Day, including the receipt by the Company of the Exercise Notice, the Warrant, and the Aggregate Exercise Price.
“Exercise Notice” has the meaning set forth in Section 3(a)(i).
“Exercise Period” has the meaning set forth in Section 2.
2
“Exercise Price” has the meaning set forth in the preamble.
“Fair Market Value” means, as of any particular date: (a) the volume weighted average of the closing sales prices of the Common Stock for such day on all domestic securities exchanges on which the Common Stock may at the time be listed; (b) if there have been no sales of the Common Stock on any such exchange on any such day, the average of the highest bid and lowest ask prices for the Common Stock on all such exchanges at the end of such day; (c) if on any such day the Common Stock is not listed on a domestic securities exchange, the closing sales price of the Common Stock as quoted on the OTC Markets or similar quotation system or association for such day; or (d) if there have been no sales of the Common Stock on the OTC Markets or similar quotation system or association on such day, the average of the highest bid and lowest ask prices for the Common Stock quoted on the OTC Markets or similar quotation system or association at the end of such day; in each case, averaged over twenty (20) consecutive Business Days ending on the Business Day immediately prior to the day as of which “Fair Market Value” is being determined; provided, that if the Common Stock is listed on any domestic securities exchange, the term “Business Day” as used in this sentence means Business Days on which such exchange is open for trading. If at any time the Common Stock is not listed on any domestic securities exchange or quoted on the OTC Markets or similar quotation system or association, the “Fair Market Value” of the Common Stock shall be the fair market value per share as determined jointly by the Board and the Holder; provided, that if the Board and the Holder are unable to agree on the fair market value per share of the Common Stock within a reasonable period of time (not to exceed 30 days from the Company’s receipt of the Exercise Notice), such fair market value shall be determined by a nationally recognized investment banking, accounting, or valuation firm engaged by the Company. The determination of such firm shall be final and conclusive, and the fees and expenses of such valuation firm shall be borne by the Company.
“Holder” has the meaning set forth in the preamble.
“Options” means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities.
“Original Issue Date” means the Original Issue Date set forth above.
“OTC Markets” means the OTC Markets Group Inc. electronic inter-dealer quotation system, including OTCQX, OTCQB, OTCID, and Pink Limited.
“Person” means any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, incorporated organization, or government or department or agency thereof.
“Purchase Agreement” has the meaning set forth in the preamble.
“Securities Act” has the meaning set forth in Section 10(a).
“Warrant” means this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.
3
“Warrant Shares” means the shares of Common Stock or other capital stock of the Company then purchasable upon exercise of this Warrant in accordance with the terms of this Warrant.
2.
Exercise Period. Subject to the terms and conditions hereof, at any time and from time to time during the period commencing on the date the Authorized Shares Condition is satisfied and continuing until 5:00 p.m., Central time, on the later of (a) 180 days following the Original Issue Date, and (b) 30 days following the date the Authorized Shares Condition is satisfied, or, if such day is not a Business Day, on the next succeeding Business Day (the “Exercise Period”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein).
3.
Exercise of Warrant.
3.1.
Exercise Procedure. This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares, upon:
3.1.1.
surrender of this Warrant to the Company at its then principal executive offices, together with an Exercise Notice in the form attached hereto as Exhibit A (each, an “Exercise Notice”), duly completed (including specifying the number of Warrant Shares to be purchased) and executed; and
3.1.2.
payment to the Company of the Aggregate Exercise Price in accordance with Section 3(b).
3.2.
Payment of the Aggregate Exercise Price. Payment of the Aggregate Exercise Price shall be made by delivery to the Company of a certified or official bank check payable to the order of the Company or by wire transfer of immediately available funds to an account designated in writing by the Company, in the amount of such Aggregate Exercise Price.
3.3.
Delivery of Stock Certificates. Upon receipt by the Company of the Exercise Notice, surrender of this Warrant, and payment of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in any event within three (3) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise, or, at the Company’s election, deliver (or cause to be delivered) to the Holder evidence of such Warrant Shares having been credited to the Holder’s account in book-entry form on the books of the Company or its transfer agent, together with cash in lieu of any fraction of a share, as provided in Section 3(d)hereof. The stock certificate or certificates or book-entry shares so delivered shall be registered in the name of the Holder or, subject to compliance with Section 6 below, such other Person’s name as shall be designated in the Exercise Notice. This Warrant shall be deemed to have been exercised and such certificate or certificates of Warrant Shares or book-entry shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the Exercise Date.
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3.4.
Fractional Shares. The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant. As to any fraction of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of (i) such fraction multiplied by (ii) the Fair Market Value of one Warrant Share on the Exercise Date.
3.5.
Delivery of New Warrant. Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued in accordance with Section 3(c) hereof, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant.
3.6.
Valid Issuance of Warrant and Warrant Shares; Payment of Taxes. With respect to the exercise of this Warrant, the Company hereby represents, covenants, and agrees:
3.6.1.
This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.
3.6.2.
All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid, and non-assessable, issued without violation of any preemptive or similar rights of any stockholder of the Company and free and clear of all taxes, liens, and charges.
3.6.3.
The Company shall take all such actions as may be necessary to ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).
3.6.4.
The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder, and no such issuance or delivery shall be made unless and until the Person requesting such issuance has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid.
3.7.
Conditional Exercise. Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company (pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case
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such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.
3.8.
Reservation of Shares. During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Exercise Price. The Company shall not increase the par value of any Warrant Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.
4.
Adjustment to Exercise Price and Number of Warrant Shares. In order to prevent dilution of the purchase rights granted under this Warrant, the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 4 (in each case, after taking into consideration any prior adjustments pursuant to this Section 4).
4.1.
Adjustment to Exercise Price and Warrant Shares Upon Dividend, Subdivision or Combination of Common Stock. If the Company shall, at any time or from time to time after the Original Issue Date, (i) pay a dividend or make any other distribution upon the Common Stock or any other capital stock of the Company payable in shares of Common Stock or in Options or Convertible Securities, or (ii) subdivide (by any stock split, recapitalization, or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to any such dividend, distribution, or subdivision shall be proportionately reduced and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately increased. If the Company at any time combines (by combination, reverse stock split, or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately decreased. Any adjustment under this Section 4(a) shall become effective at the close of business on the date the dividend, subdivision, or combination becomes effective.
4.2.
Adjustment to Exercise Price and Warrant Shares Upon Reorganization, Reclassification, Consolidation, or Merger. In the event of any (i) capital reorganization of the Company, (ii) reclassification of the stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split-up, or combination of shares), (iii) consolidation or merger of the Company with or into another Person, (iv) sale of all or substantially all of the Company’s assets to another Person or (v) other similar transaction (other than any such transaction covered by Section 4(a)), in each case which entitles the holders of Common Stock to receive (either directly or upon subsequent liquidation) stock, securities, or assets with respect to or in exchange for Common Stock, each Warrant shall, immediately after such reorganization, reclassification, consolidation, merger, sale, or similar transaction, remain outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the number of Warrant Shares then exercisable under this Warrant, be exercisable for the kind and number of shares of stock or other securities or assets of the Company
6
or of the successor Person resulting from such transaction to which the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale, or similar transaction if the Holder had exercised this Warrant in full immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale, or similar transaction and acquired the applicable number of Warrant Shares then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant); and, in such case, appropriate adjustment (in form and substance satisfactory to the Holder) shall be made with respect to the Holder’s rights under this Warrant to insure that the provisions of Section 4 shall thereafter be applicable, as nearly as possible, to this Warrant in relation to any shares of stock, securities, or assets thereafter acquirable upon exercise of this Warrant (including, in the case of any consolidation, merger, sale, or similar transaction in which the successor or purchasing Person is other than the Company, an immediate adjustment in the Exercise Price to the value per share for the Common Stock reflected by the terms of such consolidation, merger, sale, or similar transaction, and a corresponding immediate adjustment to the number of Warrant Shares acquirable upon exercise of this Warrant without regard to any limitations or restrictions on exercise, if the value so reflected is less than the Exercise Price in effect immediately prior to such consolidation, merger, sale, or similar transaction). The provisions of this Section 4(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, or similar transactions. The Company shall not effect any such reorganization, reclassification, consolidation, merger, sale, or similar transaction unless, prior to the consummation thereof, the successor Person (if other than the Company) resulting from such reorganization, reclassification, consolidation, merger, sale, or similar transaction, shall assume, by written instrument substantially similar in form and substance to this Warrant and satisfactory to the Holder, the obligation to deliver to the Holder such shares of stock, securities, or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of this Warrant. Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 4(b), the Holder shall have the right to elect prior to the consummation of such event or transaction, to give effect to the exercise rights contained in Section 2 instead of giving effect to the provisions contained in this Section 4(b) with respect to this Warrant.
4.3.
Certificate as to Adjustment.
4.3.1.
As promptly as reasonably practicable following any adjustment of the Exercise Price, but in any event not later than 10 Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof.
4.3.2.
As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later than 10 Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the Exercise Price then in effect and the number of Warrant Shares or the amount, if any, of other shares of stock, securities, or assets then issuable upon exercise of the Warrant.
4.4.
Notices. In the event:
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4.4.1.
that the Company shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon exercise of the Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, to vote at a meeting (or by written consent), to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or
4.4.2.
of any capital reorganization of the Company, any reclassification of the Common Stock of the Company, any consolidation or merger of the Company with or into another Person, or any sale of all or substantially all of the Company’s assets to another Person; or
4.4.3.
of the voluntary or involuntary dissolution, liquidation, or winding-up of the Company;
then, and in each such case, the Company shall send or cause to be sent to the Holder at least 10 days prior to the applicable record date or the applicable expected effective date, as the case may be, for the event, a written notice specifying, as the case may be, (A) the record date for such dividend, distribution, meeting or consent, or other right or action, and a description of such dividend, distribution, or other right or action to be taken at such meeting or by written consent, or (B) the effective date on which such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding-up is proposed to take place, and the date, if any is to be fixed, as of which the books of the Company shall close or a record shall be taken with respect to which holders of record of Common Stock (or such other capital stock or securities at the time issuable upon exercise of the Warrant) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding-up, and the amount per share and character of such exchange applicable to the Warrant and the Warrant Shares.
5.
Purchase Rights. In addition to any adjustments pursuant to Section 4 above, if at any time the Company grants, issues, or sells any shares of Common Stock, Options, Convertible Securities, or rights to purchase stock, warrants, securities, or other property pro rata to the record holders of Common Stock (the “Purchase Rights”), then the Holder shall be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder would have acquired if the Holder had held the number of Warrant Shares acquirable upon complete exercise of this Warrant immediately before the date on which a record is taken for the grant, issuance, or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue, or sale of such Purchase Rights. Anything herein to the contrary notwithstanding, the Holder shall not be entitled to the Purchase Rights granted herein with respect to any Excluded Issuance.
6.
Transfer of Warrant. Subject to the transfer conditions referred to in the legend endorsed hereon, this Warrant and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed Assignment in the form attached hereto as Exhibit B, together with funds sufficient to pay any transfer taxes described in Section 3(f)(iv) in connection with the making of such transfer. Upon such compliance, surrender,
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and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.
7.
Holder Not Deemed a Stockholder; Limitations on Liability. Except as otherwise specifically provided herein, prior to the issuance to the Holder of Warrant Shares in accordance with Section 3(c), the Holder shall not be entitled to vote or receive dividends with respect to, or be deemed the holder of, such Warrant Shares for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give, or withhold consent to any corporate action (whether any reorganization, issuance of stock, reclassification of stock, consolidation, merger, conveyance, or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
8.
Replacement on Loss; Division and Combination.
8.1.
Replacement of Warrant on Loss. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement or affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated, or destroyed; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.
8.2.
Division and Combination of Warrant. Subject to compliance with the applicable provisions of this Warrant as to any transfer or other assignment which may be involved in such division or combination, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject to compliance with the applicable provisions of this Warrant as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.
9.
No Impairment. The Company shall not, by amendment of its Certificate of Incorporation or Bylaws, 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
9
observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order to protect the exercise rights of the Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant.
10.
Compliance with the Securities Act.
10.1.
Agreement to Comply with the Securities Act; Legend. The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 10 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell, or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”). This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:
“THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF, EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS, OR (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.”
10.2.
Representations of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:
10.2.1.
The Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.
10.2.2.
The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
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10.2.3.
The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects, and financial condition of the Company.
11.
Warrant Register. The Company shall keep and properly maintain at its principal executive offices books for the registration of the Warrant and any transfers thereof. The Company may deem and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division, combination, or other transfer of the Warrant effected in accordance with the provisions of this Warrant.
12.
Notices. All notices, requests, consents, claims, demands, waivers, and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by email of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12).
If to the Company: |
DynaResource, Inc. 222 W. Las Colinas Blvd. Suite 1910 North Tower Las Colinas / Irving, TX 75039 Email: rhazelton@dynaresource.com Attention: Rohan Hazelton
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If to the Holder: |
Doug Metcalf Westford, MA 01886 |
13.
Cumulative Remedies. Except to the extent expressly provided in Section 7 to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.
14.
Equitable Relief. Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate
11
remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction.
15.
Entire Agreement. This Warrant, together with the Purchase Agreement and the other documents delivered pursuant thereto, constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Warrant and the statements in the Purchase Agreement, the statements in the Purchase Agreement shall control.
16.
Successor and Assigns. This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Such successors and permitted assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.
17.
No Third-Party Beneficiaries. This Warrant is for the sole benefit of the Company and the Holder and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever, under or by reason of this Warrant.
18.
Interpretation. For purposes of this Warrant and unless the context otherwise requires, (a) the words “include”, “includes”, and “including” are deemed to be followed by the words “without limitation”, (b) the word “or” is not exclusive, and (c) the words “herein”, “hereof”, “hereby”, “hereto”, and “hereunder” refer to this Warrant as a whole. All references to “$” mean the lawful currency of the United States of America. Whenever the singular is used in this Warrant, the same shall include the plural, and whenever the plural is used herein, the same shall include the singular, where appropriate. The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.
19.
Amendment and Modification; Waiver. Except as otherwise provided herein, this Warrant may only be amended, modified, or supplemented by an agreement in writing signed by each party hereto. No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach, or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
20.
Severability. If any term or provision of this Warrant is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect
12
any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.
21.
Governing Law. This Warrant shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware.
22.
Submission to Jurisdiction. Any legal suit, action, or proceeding arising out of or based upon this Warrant or the transactions contemplated hereby may be instituted in the federal courts of the United States or the courts of the State of Delaware, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, or proceeding. Service of process, summons, notice, or other document by certified or registered mail to such party’s address set forth herein shall be effective service of process for any suit, action, or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action, or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum.
23.
Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.
24.
Counterparts. This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, e-mail, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.
25.
No Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.
[signature page follows]
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IN WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.
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DynaResource, Inc., a Delaware corporation
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By: /s/ Rohan Hazelton |
Accepted and agreed,
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/s/ Doug Metcalf |
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WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF, EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS, OR (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.
Warrant Certificate No.: 7
Original Issue Date: September 1, 2026
FOR VALUE RECEIVED, DynaResource, Inc., a Delaware corporation (the “Company”), hereby certifies that Dale Petrini, or his registered assigns (the “Holder”) is entitled to purchase from the Company 222,222 duly authorized, validly issued, fully paid, and nonassessable shares of Common Stock at a purchase price per share of $0.51 (subject to adjustment as provided herein, the “Exercise Price”), all subject to the terms, conditions, and adjustments set forth below in this Warrant. Certain capitalized terms used herein are defined in Section 1 hereof.
This Warrant has been issued pursuant to the terms of the Securities Purchase Agreement of even date herewith (the “Purchase Agreement”), between the Company and the Holder.
1.
Definitions. As used in this Warrant, the following terms have the respective meanings set forth below:
“Aggregate Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price in effect as of the Exercise Date in accordance with the terms of this Warrant.
“Authorized Shares Condition” means the approval by the requisite stockholders of the Company at a duly called meeting or by written consent of an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the authorized shares of Common Stock or effect a reverse stock split to accommodate the exercise of this Warrant to purchase the Warrant Shares in accordance with the terms of this Warrant (taking into account all issued and outstanding shares of Common Stock and all shares of Common Stock required to be reserved under all (a) outstanding Convertible Securities and Options, (b) outstanding equity awards, and (c) Company equity incentive plans and the filing of such amendment with the Delaware Secretary of State.
“Board” means the board of directors of the Company.
“Business Day” means any day, except a Saturday, Sunday, or legal holiday on which banking institutions in the city of Dallas, Texas are authorized or obligated by law or executive order to close.
“Common Stock” means the common stock, par value $0.01 per share, of the Company, and any capital stock into which such Common Stock shall have been converted, exchanged, or reclassified following the date hereof.
“Company” has the meaning set forth in the preamble.
“Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options.
“Excluded Issuances” means any issuance or sale (or deemed issuance or sale in accordance with Section 4(d)) by the Company after the Original Issue Date of: (a) shares of Common Stock issued upon the exercise of this Warrant; (b) shares of Common Stock (as such number of shares is equitably adjusted for subsequent stock splits, stock combinations, stock dividends, and recapitalizations) issued directly or upon the exercise of Options to directors, officers, employees, or consultants of the Company in connection with their service as directors of the Company, their employment by the Company, or their retention as consultants by the Company, in each case authorized by the Board and issued pursuant to the Company’s 2024 Amended and Restated Equity Incentive Plan (including all such shares of Common Stock and Options outstanding prior to the Original Issue Date); (c) shares of Common Stock issued upon the conversion or exercise of Options (other than Options covered by clause (b) above) or Convertible Securities issued prior to the Original Issue Date, provided that such securities are not amended after the date hereof to increase the number of shares of Common Stock issuable thereunder or to lower the exercise or conversion price thereof; (d) shares of Common Stock, Options, or Convertible Securities issued (i) to Persons in connection with a joint venture, strategic alliance, or other commercial relationship with such Person (including Persons that are customers, suppliers, and strategic partners of the Company) relating to the operation of the Company’s business and not for the primary purpose of raising equity capital, (ii) in connection with a transaction in which the Company, directly or indirectly, acquires another business or its tangible or intangible assets, or (iii) to lenders as equity kickers in connection with debt financings of the Company, in each case where such transactions have been approved by the Board; or (e) shares of Common Stock in an offering for cash for the account of the Company that is underwritten on a firm commitment basis and is registered with the Securities and Exchange Commission under the Securities Act.
“Exercise Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall have been satisfied at or prior to 5:00 p.m., Central time, on a Business Day, including the receipt by the Company of the Exercise Notice, the Warrant, and the Aggregate Exercise Price.
“Exercise Notice” has the meaning set forth in Section 3(a)(i).
“Exercise Period” has the meaning set forth in Section 2.
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“Exercise Price” has the meaning set forth in the preamble.
“Fair Market Value” means, as of any particular date: (a) the volume weighted average of the closing sales prices of the Common Stock for such day on all domestic securities exchanges on which the Common Stock may at the time be listed; (b) if there have been no sales of the Common Stock on any such exchange on any such day, the average of the highest bid and lowest ask prices for the Common Stock on all such exchanges at the end of such day; (c) if on any such day the Common Stock is not listed on a domestic securities exchange, the closing sales price of the Common Stock as quoted on the OTC Markets or similar quotation system or association for such day; or (d) if there have been no sales of the Common Stock on the OTC Markets or similar quotation system or association on such day, the average of the highest bid and lowest ask prices for the Common Stock quoted on the OTC Markets or similar quotation system or association at the end of such day; in each case, averaged over twenty (20) consecutive Business Days ending on the Business Day immediately prior to the day as of which “Fair Market Value” is being determined; provided, that if the Common Stock is listed on any domestic securities exchange, the term “Business Day” as used in this sentence means Business Days on which such exchange is open for trading. If at any time the Common Stock is not listed on any domestic securities exchange or quoted on the OTC Markets or similar quotation system or association, the “Fair Market Value” of the Common Stock shall be the fair market value per share as determined jointly by the Board and the Holder; provided, that if the Board and the Holder are unable to agree on the fair market value per share of the Common Stock within a reasonable period of time (not to exceed 30 days from the Company’s receipt of the Exercise Notice), such fair market value shall be determined by a nationally recognized investment banking, accounting, or valuation firm engaged by the Company. The determination of such firm shall be final and conclusive, and the fees and expenses of such valuation firm shall be borne by the Company.
“Holder” has the meaning set forth in the preamble.
“Options” means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities.
“Original Issue Date” means the Original Issue Date set forth above.
“OTC Markets” means the OTC Markets Group Inc. electronic inter-dealer quotation system, including OTCQX, OTCQB, OTCID, and Pink Limited.
“Person” means any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, incorporated organization, or government or department or agency thereof.
“Purchase Agreement” has the meaning set forth in the preamble.
“Securities Act” has the meaning set forth in Section 10(a).
“Warrant” means this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.
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“Warrant Shares” means the shares of Common Stock or other capital stock of the Company then purchasable upon exercise of this Warrant in accordance with the terms of this Warrant.
2.
Exercise Period. Subject to the terms and conditions hereof, at any time and from time to time during the period commencing on the date the Authorized Shares Condition is satisfied and continuing until 5:00 p.m., Central time, on the later of (a) 180 days following the Original Issue Date, and (b) 30 days following the date the Authorized Shares Condition is satisfied, or, if such day is not a Business Day, on the next succeeding Business Day (the “Exercise Period”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein).
3.
Exercise of Warrant.
3.1.
Exercise Procedure. This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares, upon:
3.1.1.
surrender of this Warrant to the Company at its then principal executive offices, together with an Exercise Notice in the form attached hereto as Exhibit A (each, an “Exercise Notice”), duly completed (including specifying the number of Warrant Shares to be purchased) and executed; and
3.1.2.
payment to the Company of the Aggregate Exercise Price in accordance with Section 3(b).
3.2.
Payment of the Aggregate Exercise Price. Payment of the Aggregate Exercise Price shall be made by delivery to the Company of a certified or official bank check payable to the order of the Company or by wire transfer of immediately available funds to an account designated in writing by the Company, in the amount of such Aggregate Exercise Price.
3.3.
Delivery of Stock Certificates. Upon receipt by the Company of the Exercise Notice, surrender of this Warrant, and payment of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in any event within three (3) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise, or, at the Company’s election, deliver (or cause to be delivered) to the Holder evidence of such Warrant Shares having been credited to the Holder’s account in book-entry form on the books of the Company or its transfer agent, together with cash in lieu of any fraction of a share, as provided in Section 3(d)hereof. The stock certificate or certificates or book-entry shares so delivered shall be registered in the name of the Holder or, subject to compliance with Section 6 below, such other Person’s name as shall be designated in the Exercise Notice. This Warrant shall be deemed to have been exercised and such certificate or certificates of Warrant Shares or book-entry shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the Exercise Date.
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3.4.
Fractional Shares. The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant. As to any fraction of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of (i) such fraction multiplied by (ii) the Fair Market Value of one Warrant Share on the Exercise Date.
3.5.
Delivery of New Warrant. Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued in accordance with Section 3(c) hereof, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant.
3.6.
Valid Issuance of Warrant and Warrant Shares; Payment of Taxes. With respect to the exercise of this Warrant, the Company hereby represents, covenants, and agrees:
3.6.1.
This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.
3.6.2.
All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid, and non-assessable, issued without violation of any preemptive or similar rights of any stockholder of the Company and free and clear of all taxes, liens, and charges.
3.6.3.
The Company shall take all such actions as may be necessary to ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).
3.6.4.
The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder, and no such issuance or delivery shall be made unless and until the Person requesting such issuance has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid.
3.7.
Conditional Exercise. Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company (pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case
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such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.
3.8.
Reservation of Shares. During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Exercise Price. The Company shall not increase the par value of any Warrant Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.
4.
Adjustment to Exercise Price and Number of Warrant Shares. In order to prevent dilution of the purchase rights granted under this Warrant, the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 4 (in each case, after taking into consideration any prior adjustments pursuant to this Section 4).
4.1.
Adjustment to Exercise Price and Warrant Shares Upon Dividend, Subdivision or Combination of Common Stock. If the Company shall, at any time or from time to time after the Original Issue Date, (i) pay a dividend or make any other distribution upon the Common Stock or any other capital stock of the Company payable in shares of Common Stock or in Options or Convertible Securities, or (ii) subdivide (by any stock split, recapitalization, or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to any such dividend, distribution, or subdivision shall be proportionately reduced and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately increased. If the Company at any time combines (by combination, reverse stock split, or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately decreased. Any adjustment under this Section 4(a) shall become effective at the close of business on the date the dividend, subdivision, or combination becomes effective.
4.2.
Adjustment to Exercise Price and Warrant Shares Upon Reorganization, Reclassification, Consolidation, or Merger. In the event of any (i) capital reorganization of the Company, (ii) reclassification of the stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split-up, or combination of shares), (iii) consolidation or merger of the Company with or into another Person, (iv) sale of all or substantially all of the Company’s assets to another Person or (v) other similar transaction (other than any such transaction covered by Section 4(a)), in each case which entitles the holders of Common Stock to receive (either directly or upon subsequent liquidation) stock, securities, or assets with respect to or in exchange for Common Stock, each Warrant shall, immediately after such reorganization, reclassification, consolidation, merger, sale, or similar transaction, remain outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the number of Warrant Shares then exercisable under this Warrant, be exercisable for the kind and number of shares of stock or other securities or assets of the Company
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or of the successor Person resulting from such transaction to which the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale, or similar transaction if the Holder had exercised this Warrant in full immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale, or similar transaction and acquired the applicable number of Warrant Shares then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant); and, in such case, appropriate adjustment (in form and substance satisfactory to the Holder) shall be made with respect to the Holder’s rights under this Warrant to insure that the provisions Section 4 shall thereafter be applicable, as nearly as possible, to this Warrant in relation to any shares of stock, securities, or assets thereafter acquirable upon exercise of this Warrant (including, in the case of any consolidation, merger, sale, or similar transaction in which the successor or purchasing Person is other than the Company, an immediate adjustment in the Exercise Price to the value per share for the Common Stock reflected by the terms of such consolidation, merger, sale, or similar transaction, and a corresponding immediate adjustment to the number of Warrant Shares acquirable upon exercise of this Warrant without regard to any limitations or restrictions on exercise, if the value so reflected is less than the Exercise Price in effect immediately prior to such consolidation, merger, sale, or similar transaction). The provisions of this Section 4(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, or similar transactions. The Company shall not effect any such reorganization, reclassification, consolidation, merger, sale, or similar transaction unless, prior to the consummation thereof, the successor Person (if other than the Company) resulting from such reorganization, reclassification, consolidation, merger, sale, or similar transaction, shall assume, by written instrument substantially similar in form and substance to this Warrant and satisfactory to the Holder, the obligation to deliver to the Holder such shares of stock, securities, or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of this Warrant. Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 4(b), the Holder shall have the right to elect prior to the consummation of such event or transaction, to give effect to the exercise rights contained in Section 2 instead of giving effect to the provisions contained in this Section 4(b) with respect to this Warrant.
4.3.
Certificate as to Adjustment.
4.3.1.
As promptly as reasonably practicable following any adjustment of the Exercise Price, but in any event not later than 10 Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof.
4.3.2.
As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later than 10 Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the Exercise Price then in effect and the number of Warrant Shares or the amount, if any, of other shares of stock, securities, or assets then issuable upon exercise of the Warrant.
4.4.
Notices. In the event:
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4.4.1.
that the Company shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon exercise of the Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, to vote at a meeting (or by written consent), to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or
4.4.2.
of any capital reorganization of the Company, any reclassification of the Common Stock of the Company, any consolidation or merger of the Company with or into another Person, or any sale of all or substantially all of the Company’s assets to another Person; or
4.4.3.
of the voluntary or involuntary dissolution, liquidation, or winding-up of the Company;
then, and in each such case, the Company shall send or cause to be sent to the Holder at least 10 days prior to the applicable record date or the applicable expected effective date, as the case may be, for the event, a written notice specifying, as the case may be, (A) the record date for such dividend, distribution, meeting or consent, or other right or action, and a description of such dividend, distribution, or other right or action to be taken at such meeting or by written consent, or (B) the effective date on which such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding-up is proposed to take place, and the date, if any is to be fixed, as of which the books of the Company shall close or a record shall be taken with respect to which holders of record of Common Stock (or such other capital stock or securities at the time issuable upon exercise of the Warrant) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding-up, and the amount per share and character of such exchange applicable to the Warrant and the Warrant Shares.
5.
Purchase Rights. In addition to any adjustments pursuant to Section 4 above, if at any time the Company grants, issues, or sells any shares of Common Stock, Options, Convertible Securities, or rights to purchase stock, warrants, securities, or other property pro rata to the record holders of Common Stock (the “Purchase Rights”), then the Holder shall be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder would have acquired if the Holder had held the number of Warrant Shares acquirable upon complete exercise of this Warrant immediately before the date on which a record is taken for the grant, issuance, or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue, or sale of such Purchase Rights. Anything herein to the contrary notwithstanding, the Holder shall not be entitled to the Purchase Rights granted herein with respect to any Excluded Issuance.
6.
Transfer of Warrant. Subject to the transfer conditions referred to in the legend endorsed hereon, this Warrant and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed Assignment in the form attached hereto as Exhibit B, together with funds sufficient to pay any transfer taxes described in Section 3(f)(iv) in connection with the making of such transfer. Upon such compliance, surrender,
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and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.
7.
Holder Not Deemed a Stockholder; Limitations on Liability. Except as otherwise specifically provided herein, prior to the issuance to the Holder of Warrant Shares in accordance with Section 3(c), the Holder shall not be entitled to vote or receive dividends with respect to, or be deemed the holder of, such Warrant Shares for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give, or withhold consent to any corporate action (whether any reorganization, issuance of stock, reclassification of stock, consolidation, merger, conveyance, or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
8.
Replacement on Loss; Division and Combination.
8.1.
Replacement of Warrant on Loss. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement or affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated, or destroyed; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.
8.2.
Division and Combination of Warrant. Subject to compliance with the applicable provisions of this Warrant as to any transfer or other assignment which may be involved in such division or combination, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject to compliance with the applicable provisions of this Warrant as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.
9.
No Impairment. The Company shall not, by amendment of its Certificate of Incorporation or Bylaws, 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
9
observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order to protect the exercise rights of the Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant.
10.
Compliance with the Securities Act.
10.1.
Agreement to Comply with the Securities Act; Legend. The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 10 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell, or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”). This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:
“THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF, EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS, OR (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.”
10.2.
Representations of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:
10.2.1.
The Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.
10.2.2.
The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
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10.2.3.
The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects, and financial condition of the Company.
11.
Warrant Register. The Company shall keep and properly maintain at its principal executive offices books for the registration of the Warrant and any transfers thereof. The Company may deem and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division, combination, or other transfer of the Warrant effected in accordance with the provisions of this Warrant.
12.
Notices. All notices, requests, consents, claims, demands, waivers, and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by email of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12).
If to the Company: |
DynaResource, Inc. 222 W. Las Colinas Blvd. Suite 1910 North Tower Las Colinas / Irving, TX 75039 Email: rhazelton@dynaresource.com Attention: Rohan Hazelton
|
If to the Holder: |
Dale Petrini Houston, TX 77027 |
13.
Cumulative Remedies. Except to the extent expressly provided in Section 7 to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.
14.
Equitable Relief. Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate
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remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction.
15.
Entire Agreement. This Warrant, together with the Purchase Agreement and the other documents delivered pursuant thereto, constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Warrant and the statements in the Purchase Agreement, the statements in the Purchase Agreement shall control.
16.
Successor and Assigns. This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Such successors and permitted assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.
17.
No Third-Party Beneficiaries. This Warrant is for the sole benefit of the Company and the Holder and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever, under or by reason of this Warrant.
18.
Interpretation. For purposes of this Warrant and unless the context otherwise requires, (a) the words “include”, “includes”, and “including” are deemed to be followed by the words “without limitation”, (b) the word “or” is not exclusive, and (c) the words “herein”, “hereof”, “hereby”, “hereto”, and “hereunder” refer to this Warrant as a whole. All references to “$” mean the lawful currency of the United States of America. Whenever the singular is used in this Warrant, the same shall include the plural, and whenever the plural is used herein, the same shall include the singular, where appropriate. The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.
19.
Amendment and Modification; Waiver. Except as otherwise provided herein, this Warrant may only be amended, modified, or supplemented by an agreement in writing signed by each party hereto. No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach, or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
20.
Severability. If any term or provision of this Warrant is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect
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any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.
21.
Governing Law. This Warrant shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware.
22.
Submission to Jurisdiction. Any legal suit, action, or proceeding arising out of or based upon this Warrant or the transactions contemplated hereby may be instituted in the federal courts of the United States or the courts of the State of Delaware, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, or proceeding. Service of process, summons, notice, or other document by certified or registered mail to such party’s address set forth herein shall be effective service of process for any suit, action, or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action, or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum.
23.
Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.
24.
Counterparts. This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, e-mail, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.
25.
No Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.
[signature page follows]
If to the Company: |
DynaResource, Inc. 222 W. Las Colinas Blvd. Suite 1910 North Tower Las Colinas / Irving, TX 75039 Email: rhazelton@dynaresource.com Attention: Rohan Hazelton
|
If to the Holder: |
Dale Petrini |
13
|
Houston, TX 77027 |
13.
Cumulative Remedies. Except to the extent expressly provided in Section 7 to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.
14.
Equitable Relief. Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction.
15.
Entire Agreement. This Warrant, together with the Purchase Agreement and the other documents delivered pursuant thereto, constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Warrant and the statements in the Purchase Agreement, the statements in the Purchase Agreement shall control.
16.
Successor and Assigns. This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Such successors and permitted assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.
17.
No Third-Party Beneficiaries. This Warrant is for the sole benefit of the Company and the Holder and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever, under or by reason of this Warrant.
18.
Interpretation. For purposes of this Warrant and unless the context otherwise requires, (a) the words “include”, “includes”, and “including” are deemed to be followed by the words “without limitation”, (b) the word “or” is not exclusive, and (c) the words “herein”, “hereof”, “hereby”, “hereto”, and “hereunder” refer to this Warrant as a whole. All references to “$” mean the lawful currency of the United States of America. Whenever the singular is used in this Warrant, the same shall include the plural, and whenever the plural is used herein, the same shall include the singular, where appropriate. The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.
19.
Amendment and Modification; Waiver. Except as otherwise provided herein, this Warrant may only be amended, modified, or supplemented by an agreement in writing signed by each party hereto. No waiver by the Company or the Holder of any of the provisions hereof shall
14
be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach, or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
20.
Severability. If any term or provision of this Warrant is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.
21.
Governing Law. This Warrant shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware.
22.
Submission to Jurisdiction. Any legal suit, action, or proceeding arising out of or based upon this Warrant or the transactions contemplated hereby may be instituted in the federal courts of the United States or the courts of the State of Delaware, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, or proceeding. Service of process, summons, notice, or other document by certified or registered mail to such party’s address set forth herein shall be effective service of process for any suit, action, or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action, or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum.
23.
Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.
24.
Counterparts. This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, e-mail, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.
25.
No Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.
[signature page follows]
15
IN WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.
|
DynaResource, Inc., a Delaware corporation
|
|
By: /s/ Rohan Hazelton |
Accepted and agreed,
|
|
|
|
/s/ Dale Petrini |
|
16
VOTING AGREEMENT
THIS VOTING AGREEMENT (this “Agreement”), is dated as of September 1, 2026 (the “Effective Date”), and is by and between DynaResource, Inc., a Delaware corporation (the “Company”), and the stockholder identified on the signature page hereto (the “Stockholder”). The Company and the Stockholder may also be referred to in this Agreement individually as a “Party” and collectively as the “Parties”.
Recitals
A. As of the date hereof, the Stockholder owns of record and/or beneficially the shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), and preferred stock, par value $0.0001 per share (the “Preferred Stock”), as set forth on the signature page hereto (together with any other shares of Common Stock and/or Preferred Stock hereafter acquired by the Stockholder prior to the termination of this Agreement) (collectively, the “Shares”).
B. The Company intends to issue and sell up to 6,666,666 units, each unit consisting of one share of Common Stock and one warrant (the “Warrants”) to purchase one share of Common Stock at an exercise price of $0.51 per share (the “Units”) in a private offering with certain existing stockholders of the Company (the “Purchasers”) at a purchase price of $0.45 per Unit (the “Offering”).
C. The sale of the Units in the Offering will result in there being inadequate authorized shares of the Common Stock reserved for issuance in accordance with the requirements of the Company’s outstanding derivative securities, including the Warrants, and existing equity incentive plans (the “Reserve Requirements”).
D. In light of the foregoing, the Company desires to amend its Amended and Restated Certificate of Incorporation, as amended, to either increase its number of authorized shares of Common Stock or effect a reverse stock split of the Common Stock, in each case to regain compliance with the Reservation Requirements (the “Charter Amendment”).
E. Approval of the Charter Amendment requires the affirmative vote of holders of a majority of the outstanding shares of (i) the Common Stock and Preferred Stock (on an “as converted” basis) entitled to vote thereon, voting as a single class, and, (ii) in the case of a Charter Amendment to increase the authorized shares of the Common Stock, the Common Stock entitled to vote thereon, voting as a single class, at an annual or special meeting of stockholders.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants and agreements contained in this Agreement, and intending to be legally bound, the Parties agree as follows:
I.
Voting of Shares.
(a)
The Stockholder covenants and agrees that until the termination of this Agreement in accordance with its terms, at any annual or special meeting of stockholders of the Company at which the Charter Amendment is submitted for stockholder approval, the Stockholder
agrees to vote, or cause to be voted, all of the Shares in favor of the approval of the Charter Amendment.
(b)
The Stockholder hereby irrevocably grants to, and appoints, the Company, and any individual designated in writing by it, and each of them individually, as the Stockholder’s proxy and attorney-in-fact (with full power of substitution), for and in the Stockholder’s name, place and stead, to vote the Stockholder’s Shares at any annual or special meeting of stockholders called with respect to the Charter Amendment in accordance and consistent with this Section 1. The Stockholder understands and acknowledges that the Company is entering into this Agreement in reliance upon the Stockholder’s execution and delivery of this Agreement. The Stockholder hereby affirms that the irrevocable proxy set forth in this Section 1(b) is given in connection with the Company’s solicitation of stockholder approval of the Charter Amendment, and that such irrevocable proxy is given to secure the performance of the duties of the Stockholder under this Agreement. The Stockholder hereby (i) affirms that the irrevocable proxy is coupled with an interest and may under no circumstances be revoked, (ii) ratifies and confirms all that the proxies appointed under this Section 1 may lawfully do or cause to be done by virtue hereof and (iii) affirms that such irrevocable proxy is executed and intended to be irrevocable in accordance with Section 212 of the Delaware General Corporation Law. Notwithstanding any other provisions of this Agreement, the irrevocable proxy granted hereunder shall automatically terminate upon the termination of this Agreement.
II.
Transfer of Shares. The Stockholder covenants and agrees that the Stockholder will not directly or indirectly (i) sell, assign, transfer (including by merger, testamentary disposition, interspousal disposition pursuant to a domestic relations proceeding or otherwise by operation of law), pledge, encumber or otherwise dispose of any of the Shares, (ii) deposit any of the Shares into a voting trust or enter into a voting agreement or arrangement with respect to the Shares or grant any proxy or power of attorney with respect thereto which is inconsistent with this Agreement, (iii) enter into any contract, option or other arrangement or undertaking with respect to the direct or indirect sale, assignment, transfer (including by merger, testamentary disposition, interspousal disposition pursuant to a domestic relations proceeding or otherwise by operation of law) or other disposition of any Shares or (iv) otherwise commit any act, except as permitted by this Agreement or required by order of a court of competent jurisdiction, that could restrict or otherwise affect the Stockholder’s legal power, authority and right to vote all of the Shares then owned of record or beneficially by the Stockholder.
III.
Representations and Warranties of the Stockholder. The Stockholder hereby represents and warrants to the Company with respect to the Stockholder and the Stockholder’s ownership of the Shares as follows:
(a)
Ownership of Shares. The Stockholder legally owns all of the Shares as set forth on the signature page hereto as being owned by the Stockholder and has good and marketable title to such Shares, free and clear of any claims, liens, encumbrances and security interests whatsoever (other than general restrictions on transferability imposed by federal and state securities laws). The Stockholder owns no capital stock of the Company other than the Shares as set forth on the signature page hereto. The Stockholder has sole voting power, without restrictions, with respect to all of the Shares.
2
(b)
Power, Binding Agreement. The Stockholder has the legal capacity and all requisite power and authority to enter into and perform all of the Stockholder’s obligations under this Agreement. This Agreement has been duly and validly executed and delivered by the Stockholder and constitutes a valid and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors’ rights generally and subject to general principles of equity.
(c)
No Conflicts. The execution, delivery, and performance of this Agreement by the Stockholder do not, and the consummation of the transactions contemplated hereby by the Stockholder will not, conflict with or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, any provision of any loan or credit agreement, note, bond, mortgage, indenture, lease, or other agreement, instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Stockholder, the Shares or any of the Stockholder’s properties or assets. Except as expressly contemplated by this Agreement, the Stockholder is not a party to, and the Shares are not subject to or bound in any manner by, any contract or agreement relating to the Shares, including without limitation, any voting agreement, option agreement, purchase agreement, stockholders’ agreement, partnership agreement or voting trust. No consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality, domestic, foreign or supranational, is required by or with respect to the Stockholder in connection with the execution and delivery of this Agreement or the consummation by the Stockholder of the transactions contemplated hereby.
IV.
Termination. This Agreement shall terminate upon the earlier to occur of (i) the filing of the Charter Amendment with the Secretary of State of the State of Delaware or (ii) twelve (12) months following the Effective Date; provided that no such termination shall relieve any Party of liability for a breach of this Agreement before such termination.
V.
Specific Performance. The Stockholder agrees that irreparable damage will occur if any provision of this Agreement is not performed in accordance with the terms of this Agreement and that the Company shall be entitled to specific performance of the terms of this Agreement, in addition to any other remedy at law or in equity without posting any bond or other undertaking.
VI.
Miscellaneous.
(a)
Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both written and oral, between the Parties with respect to such subject matter. This Agreement may not be amended, modified or rescinded except by an instrument in writing signed by each of the Parties.
(b)
Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect.
3
(c)
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to the principles of conflicts of law thereof.
(d)
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery by any party of a facsimile or .pdf signature page shall be deemed to be delivery of an originally executed signature.
(e)
No Third Party Beneficiaries. This Agreement is not intended, and shall not be deemed, to confer any rights or remedies upon any person other than the Parties and their respective successors and permitted assigns, to create any agreement of employment with any person or to otherwise create any third-party beneficiary.
(f)
Notices. All notices, communications and deliveries hereunder shall be made in writing signed by the Party making the same, and shall be deemed given or made (i) on the date delivered if delivered in person, (ii) on the third business day after it is mailed if mailed by registered or certified mail (return receipt requested) (with postage and other fees prepaid), (iii) on the next business day after deposit with a nationally recognized overnight courier service, or (iv) upon confirmed receipt if delivered by email, as follows:
To the Company:
DynaResource, Inc.
The Urban Towers of Las Colinas
222 W. Las Colinas Blvd.
Suite 1910 – North Tower
Irving, Texas 75039
Attention: Rohan Hazelton
Email: rhazelton@dynaresource.com
To the Stockholder:
To the address set forth on the Stockholder’s signature page.
(g)
Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise by any of the Parties without the prior written consent of the other Party, and any such assignment without such prior written consent shall be null and void. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and permitted assigns.
(h)
Interpretation. When reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement, unless otherwise indicated. The headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule
4
of strict construction shall be applied against any Party. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice versa. Any reference to any law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” No summary of this Agreement prepared by the Parties shall affect in any way the meaning or interpretation of this Agreement.
(i)
WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND THE STOCKHOLDER HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE COMPANY OR THE STOCKHOLDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT.
[Signature page follows]
5
IN WITNESS WHEREOF, each of the Parties has caused this Voting Agreement to be signed individually or by its respective duly authorized officer as of the date first written above.
COMPANY:
DynaResource, Inc., a Delaware Corporation
By: /s/ Rohan Hazelton
Name: Rohan Hazelton
Title: Chief Executive Officer
STOCKHOLDER:
Golden Post Rail, LLC
By: /s/ Matthew K. Rose
Name: Matthew K. Rose
Title: Manager
Number of Shares (post-closing of Offering):
Common: 4,389,304 |
Series C Preferred: 1,734,992 |
Series D Preferred: None |
Series E Preferred: 1,552,795 |
Address:
2633 Magnolia Circle
Westlake, TX 76262
Attention: Matthew K. Rose
Email: mrose@xtiecapital.com
[SIGNATURE PAGE TO VOTING AGREEMENT]
VOTING AGREEMENT
THIS VOTING AGREEMENT (this “Agreement”), is dated as of September 1, 2026 (the “Effective Date”), and is by and between DynaResource, Inc., a Delaware corporation (the “Company”), and the stockholder identified on the signature page hereto (the “Stockholder”). The Company and the Stockholder may also be referred to in this Agreement individually as a “Party” and collectively as the “Parties”.
Recitals
A. As of the date hereof, the Stockholder owns of record and/or beneficially the shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), and preferred stock, par value $0.0001 per share (the “Preferred Stock”), as set forth on the signature page hereto (together with any other shares of Common Stock and/or Preferred Stock hereafter acquired by the Stockholder prior to the termination of this Agreement) (collectively, the “Shares”).
B. The Company intends to issue and sell up to 6,666,666 units, each unit consisting of one share of Common Stock and one warrant (the “Warrants”) to purchase one share of Common Stock at an exercise price of $0.51 per share (the “Units”) in a private offering with certain existing stockholders of the Company (the “Purchasers”) at a purchase price of $0.45 per Unit (the “Offering”).
C. The sale of the Units in the Offering will result in there being inadequate authorized shares of the Common Stock reserved for issuance in accordance with the requirements of the Company’s outstanding derivative securities, including the Warrants, and existing equity incentive plans (the “Reserve Requirements”).
D. In light of the foregoing, the Company desires to amend its Amended and Restated Certificate of Incorporation, as amended, to either increase its number of authorized shares of Common Stock or effect a reverse stock split of the Common Stock, in each case to regain compliance with the Reservation Requirements (the “Charter Amendment”).
E. Approval of the Charter Amendment requires the affirmative vote of holders of a majority of the outstanding shares of (i) the Common Stock and Preferred Stock (on an “as converted” basis) entitled to vote thereon, voting as a single class, and, (ii) in the case of a Charter Amendment to increase the authorized shares of the Common Stock, the Common Stock entitled to vote thereon, voting as a single class, at an annual or special meeting of stockholders.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants and agreements contained in this Agreement, and intending to be legally bound, the Parties agree as follows:
I.
Voting of Shares.
(a)
The Stockholder covenants and agrees that until the termination of this Agreement in accordance with its terms, at any annual or special meeting of stockholders of the Company at which the Charter Amendment is submitted for stockholder approval, the Stockholder
agrees to vote, or cause to be voted, all of the Shares in favor of the approval of the Charter Amendment.
(b)
The Stockholder hereby irrevocably grants to, and appoints, the Company, and any individual designated in writing by it, and each of them individually, as the Stockholder’s proxy and attorney-in-fact (with full power of substitution), for and in the Stockholder’s name, place and stead, to vote the Stockholder’s Shares at any annual or special meeting of stockholders called with respect to the Charter Amendment in accordance and consistent with this Section 1. The Stockholder understands and acknowledges that the Company is entering into this Agreement in reliance upon the Stockholder’s execution and delivery of this Agreement. The Stockholder hereby affirms that the irrevocable proxy set forth in this Section 1(b) is given in connection with the Company’s solicitation of stockholder approval of the Charter Amendment, and that such irrevocable proxy is given to secure the performance of the duties of the Stockholder under this Agreement. The Stockholder hereby (i) affirms that the irrevocable proxy is coupled with an interest and may under no circumstances be revoked, (ii) ratifies and confirms all that the proxies appointed under this Section 1 may lawfully do or cause to be done by virtue hereof and (iii) affirms that such irrevocable proxy is executed and intended to be irrevocable in accordance with Section 212 of the Delaware General Corporation Law. Notwithstanding any other provisions of this Agreement, the irrevocable proxy granted hereunder shall automatically terminate upon the termination of this Agreement.
II.
Transfer of Shares. The Stockholder covenants and agrees that the Stockholder will not directly or indirectly (i) sell, assign, transfer (including by merger, testamentary disposition, interspousal disposition pursuant to a domestic relations proceeding or otherwise by operation of law), pledge, encumber or otherwise dispose of any of the Shares, (ii) deposit any of the Shares into a voting trust or enter into a voting agreement or arrangement with respect to the Shares or grant any proxy or power of attorney with respect thereto which is inconsistent with this Agreement, (iii) enter into any contract, option or other arrangement or undertaking with respect to the direct or indirect sale, assignment, transfer (including by merger, testamentary disposition, interspousal disposition pursuant to a domestic relations proceeding or otherwise by operation of law) or other disposition of any Shares or (iv) otherwise commit any act, except as permitted by this Agreement or required by order of a court of competent jurisdiction, that could restrict or otherwise affect the Stockholder’s legal power, authority and right to vote all of the Shares then owned of record or beneficially by the Stockholder.
III.
Representations and Warranties of the Stockholder. The Stockholder hereby represents and warrants to the Company with respect to the Stockholder and the Stockholder’s ownership of the Shares as follows:
(a)
Ownership of Shares. The Stockholder legally owns all of the Shares as set forth on the signature page hereto as being owned by the Stockholder and has good and marketable title to such Shares, free and clear of any claims, liens, encumbrances and security interests whatsoever (other than general restrictions on transferability imposed by federal and state securities laws). The Stockholder owns no capital stock of the Company other than the Shares as set forth on the signature page hereto. The Stockholder has sole voting power, without restrictions, with respect to all of the Shares.
2
(b)
Power, Binding Agreement. The Stockholder has the legal capacity and all requisite power and authority to enter into and perform all of the Stockholder’s obligations under this Agreement. This Agreement has been duly and validly executed and delivered by the Stockholder and constitutes a valid and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors’ rights generally and subject to general principles of equity.
(c)
No Conflicts. The execution, delivery, and performance of this Agreement by the Stockholder do not, and the consummation of the transactions contemplated hereby by the Stockholder will not, conflict with or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, any provision of any loan or credit agreement, note, bond, mortgage, indenture, lease, or other agreement, instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Stockholder, the Shares or any of the Stockholder’s properties or assets. Except as expressly contemplated by this Agreement, the Stockholder is not a party to, and the Shares are not subject to or bound in any manner by, any contract or agreement relating to the Shares, including without limitation, any voting agreement, option agreement, purchase agreement, stockholders’ agreement, partnership agreement or voting trust. No consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality, domestic, foreign or supranational, is required by or with respect to the Stockholder in connection with the execution and delivery of this Agreement or the consummation by the Stockholder of the transactions contemplated hereby.
IV.
Termination. This Agreement shall terminate upon the earlier to occur of (i) the filing of the Charter Amendment with the Secretary of State of the State of Delaware or (ii) twelve (12) months following the Effective Date; provided that no such termination shall relieve any Party of liability for a breach of this Agreement before such termination.
V.
Specific Performance. The Stockholder agrees that irreparable damage will occur if any provision of this Agreement is not performed in accordance with the terms of this Agreement and that the Company shall be entitled to specific performance of the terms of this Agreement, in addition to any other remedy at law or in equity without posting any bond or other undertaking.
VI.
Miscellaneous.
(a)
Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both written and oral, between the Parties with respect to such subject matter. This Agreement may not be amended, modified or rescinded except by an instrument in writing signed by each of the Parties.
(b)
Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect.
3
(c)
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to the principles of conflicts of law thereof.
(d)
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery by any party of a facsimile or .pdf signature page shall be deemed to be delivery of an originally executed signature.
(e)
No Third Party Beneficiaries. This Agreement is not intended, and shall not be deemed, to confer any rights or remedies upon any person other than the Parties and their respective successors and permitted assigns, to create any agreement of employment with any person or to otherwise create any third-party beneficiary.
(f)
Notices. All notices, communications and deliveries hereunder shall be made in writing signed by the Party making the same, and shall be deemed given or made (i) on the date delivered if delivered in person, (ii) on the third business day after it is mailed if mailed by registered or certified mail (return receipt requested) (with postage and other fees prepaid), (iii) on the next business day after deposit with a nationally recognized overnight courier service, or (iv) upon confirmed receipt if delivered by email, as follows:
To the Company:
DynaResource, Inc.
The Urban Towers of Las Colinas
222 W. Las Colinas Blvd.
Suite 1910 – North Tower
Irving, Texas 75039
Attention: Rohan Hazelton
Email: rhazelton@dynaresource.com
To the Stockholder:
To the address set forth on the Stockholder’s signature page.
(g)
Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise by any of the Parties without the prior written consent of the other Party, and any such assignment without such prior written consent shall be null and void. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and permitted assigns.
(h)
Interpretation. When reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement, unless otherwise indicated. The headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule
4
of strict construction shall be applied against any Party. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice versa. Any reference to any law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” No summary of this Agreement prepared by the Parties shall affect in any way the meaning or interpretation of this Agreement.
(i)
WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND THE STOCKHOLDER HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE COMPANY OR THE STOCKHOLDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT.
[Signature page follows]
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IN WITNESS WHEREOF, each of the Parties has caused this Voting Agreement to be signed individually or by its respective duly authorized officer as of the date first written above.
COMPANY:
DynaResource, Inc., a Delaware corporation
By: /s/ Rohan Hazelton
Name: Rohan Hazelton
Title: Chief Executive Officer
STOCKHOLDER:
Ocean Partners UK Limited
By: /s/ Neil Poulter
Name: Neil Poulter
Title: Director
Number of Shares (post-closing of Offering):
Common: 5,162,308 |
Series C Preferred: None |
Series D Preferred: None |
Series E Preferred: None |
Address:
3rd Floor, The Pearce Building, West Street
Maidenhead, Berkshire, UK SL6 1RL
Attention: Brent Omland
Email: brent.omland@oceanpartners.com
[SIGNATURE PAGE TO VOTING AGREEMENT]
VOTING AGREEMENT
THIS VOTING AGREEMENT (this “Agreement”), is dated as of September 1, 2026 (the “Effective Date”), and is by and between DynaResource, Inc., a Delaware corporation (the “Company”), and the stockholder identified on the signature page hereto (the “Stockholder”). The Company and the Stockholder may also be referred to in this Agreement individually as a “Party” and collectively as the “Parties”.
Recitals
A. As of the date hereof, the Stockholder owns of record and/or beneficially the shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), and preferred stock, par value $0.0001 per share (the “Preferred Stock”), as set forth on the signature page hereto (together with any other shares of Common Stock and/or Preferred Stock hereafter acquired by the Stockholder prior to the termination of this Agreement) (collectively, the “Shares”).
B. The Company intends to issue and sell up to 6,666,666 units, each unit consisting of one share of Common Stock and one warrant (the “Warrants”) to purchase one share of Common Stock at an exercise price of $0.51 per share (the “Units”) in a private offering with certain existing stockholders of the Company (the “Purchasers”) at a purchase price of $0.45 per Unit (the “Offering”).
C. The sale of the Units in the Offering will result in there being inadequate authorized shares of the Common Stock reserved for issuance in accordance with the requirements of the Company’s outstanding derivative securities, including the Warrants, and existing equity incentive plans (the “Reserve Requirements”).
D. In light of the foregoing, the Company desires to amend its Amended and Restated Certificate of Incorporation, as amended, to either increase its number of authorized shares of Common Stock or effect a reverse stock split of the Common Stock, in each case to regain compliance with the Reservation Requirements (the “Charter Amendment”).
E. Approval of the Charter Amendment requires the affirmative vote of holders of a majority of the outstanding shares of (i) the Common Stock and Preferred Stock (on an “as converted” basis) entitled to vote thereon, voting as a single class, and, (ii) in the case of a Charter Amendment to increase the authorized shares of the Common Stock, the Common Stock entitled to vote thereon, voting as a single class, at an annual or special meeting of stockholders.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants and agreements contained in this Agreement, and intending to be legally bound, the Parties agree as follows:
I.
Voting of Shares.
(a)
The Stockholder covenants and agrees that until the termination of this Agreement in accordance with its terms, at any annual or special meeting of stockholders of the Company at which the Charter Amendment is submitted for stockholder approval, the Stockholder
agrees to vote, or cause to be voted, all of the Shares in favor of the approval of the Charter Amendment.
(b)
The Stockholder hereby irrevocably grants to, and appoints, the Company, and any individual designated in writing by it, and each of them individually, as the Stockholder’s proxy and attorney-in-fact (with full power of substitution), for and in the Stockholder’s name, place and stead, to vote the Stockholder’s Shares at any annual or special meeting of stockholders called with respect to the Charter Amendment in accordance and consistent with this Section 1. The Stockholder understands and acknowledges that the Company is entering into this Agreement in reliance upon the Stockholder’s execution and delivery of this Agreement. The Stockholder hereby affirms that the irrevocable proxy set forth in this Section 1(b) is given in connection with the Company’s solicitation of stockholder approval of the Charter Amendment, and that such irrevocable proxy is given to secure the performance of the duties of the Stockholder under this Agreement. The Stockholder hereby (i) affirms that the irrevocable proxy is coupled with an interest and may under no circumstances be revoked, (ii) ratifies and confirms all that the proxies appointed under this Section 1 may lawfully do or cause to be done by virtue hereof and (iii) affirms that such irrevocable proxy is executed and intended to be irrevocable in accordance with Section 212 of the Delaware General Corporation Law. Notwithstanding any other provisions of this Agreement, the irrevocable proxy granted hereunder shall automatically terminate upon the termination of this Agreement.
II.
Transfer of Shares. The Stockholder covenants and agrees that the Stockholder will not directly or indirectly (i) sell, assign, transfer (including by merger, testamentary disposition, interspousal disposition pursuant to a domestic relations proceeding or otherwise by operation of law), pledge, encumber or otherwise dispose of any of the Shares, (ii) deposit any of the Shares into a voting trust or enter into a voting agreement or arrangement with respect to the Shares or grant any proxy or power of attorney with respect thereto which is inconsistent with this Agreement, (iii) enter into any contract, option or other arrangement or undertaking with respect to the direct or indirect sale, assignment, transfer (including by merger, testamentary disposition, interspousal disposition pursuant to a domestic relations proceeding or otherwise by operation of law) or other disposition of any Shares or (iv) otherwise commit any act, except as permitted by this Agreement or required by order of a court of competent jurisdiction, that could restrict or otherwise affect the Stockholder’s legal power, authority and right to vote all of the Shares then owned of record or beneficially by the Stockholder.
III.
Representations and Warranties of the Stockholder. The Stockholder hereby represents and warrants to the Company with respect to the Stockholder and the Stockholder’s ownership of the Shares as follows:
(a)
Ownership of Shares. The Stockholder legally owns all of the Shares as set forth on the signature page hereto as being owned by the Stockholder and has good and marketable title to such Shares, free and clear of any claims, liens, encumbrances and security interests whatsoever (other than general restrictions on transferability imposed by federal and state securities laws). The Stockholder owns no capital stock of the Company other than the Shares as set forth on the signature page hereto. The Stockholder has sole voting power, without restrictions, with respect to all of the Shares.
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(b)
Power, Binding Agreement. The Stockholder has the legal capacity and all requisite power and authority to enter into and perform all of the Stockholder’s obligations under this Agreement. This Agreement has been duly and validly executed and delivered by the Stockholder and constitutes a valid and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors’ rights generally and subject to general principles of equity.
(c)
No Conflicts. The execution, delivery, and performance of this Agreement by the Stockholder do not, and the consummation of the transactions contemplated hereby by the Stockholder will not, conflict with or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, any provision of any loan or credit agreement, note, bond, mortgage, indenture, lease, or other agreement, instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Stockholder, the Shares or any of the Stockholder’s properties or assets. Except as expressly contemplated by this Agreement, the Stockholder is not a party to, and the Shares are not subject to or bound in any manner by, any contract or agreement relating to the Shares, including without limitation, any voting agreement, option agreement, purchase agreement, stockholders’ agreement, partnership agreement or voting trust. No consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality, domestic, foreign or supranational, is required by or with respect to the Stockholder in connection with the execution and delivery of this Agreement or the consummation by the Stockholder of the transactions contemplated hereby.
IV.
Termination. This Agreement shall terminate upon the earlier to occur of (i) the filing of the Charter Amendment with the Secretary of State of the State of Delaware or (ii) twelve (12) months following the Effective Date; provided that no such termination shall relieve any Party of liability for a breach of this Agreement before such termination.
V.
Specific Performance. The Stockholder agrees that irreparable damage will occur if any provision of this Agreement is not performed in accordance with the terms of this Agreement and that the Company shall be entitled to specific performance of the terms of this Agreement, in addition to any other remedy at law or in equity without posting any bond or other undertaking.
VI.
Miscellaneous.
(a)
Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both written and oral, between the Parties with respect to such subject matter. This Agreement may not be amended, modified or rescinded except by an instrument in writing signed by each of the Parties.
(b)
Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect.
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(c)
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to the principles of conflicts of law thereof.
(d)
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery by any party of a facsimile or .pdf signature page shall be deemed to be delivery of an originally executed signature.
(e)
No Third Party Beneficiaries. This Agreement is not intended, and shall not be deemed, to confer any rights or remedies upon any person other than the Parties and their respective successors and permitted assigns, to create any agreement of employment with any person or to otherwise create any third-party beneficiary.
(f)
Notices. All notices, communications and deliveries hereunder shall be made in writing signed by the Party making the same, and shall be deemed given or made (i) on the date delivered if delivered in person, (ii) on the third business day after it is mailed if mailed by registered or certified mail (return receipt requested) (with postage and other fees prepaid), (iii) on the next business day after deposit with a nationally recognized overnight courier service, or (iv) upon confirmed receipt if delivered by email, as follows:
To the Company:
DynaResource, Inc.
The Urban Towers of Las Colinas
222 W. Las Colinas Blvd.
Suite 1910 – North Tower
Irving, Texas 75039
Attention: Rohan Hazelton
Email: rhazelton@dynaresource.com
To the Stockholder:
To the address set forth on the Stockholder’s signature page.
(g)
Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise by any of the Parties without the prior written consent of the other Party, and any such assignment without such prior written consent shall be null and void. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and permitted assigns.
(h)
Interpretation. When reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement, unless otherwise indicated. The headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule
4
of strict construction shall be applied against any Party. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice versa. Any reference to any law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” No summary of this Agreement prepared by the Parties shall affect in any way the meaning or interpretation of this Agreement.
(i)
WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND THE STOCKHOLDER HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE COMPANY OR THE STOCKHOLDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT.
[Signature page follows]
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IN WITNESS WHEREOF, each of the Parties has caused this Voting Agreement to be signed individually or by its respective duly authorized officer as of the date first written above.
COMPANY:
DynaResource, Inc., a Delaware corporation
By: /s/ Rohan Hazelton
Name: Rohan Hazelton
Title: Chief Executive Officer
STOCKHOLDER:
/s/ Gareth Nichol
Printed Name: Gareth Nichol
Number of Shares (post-closing of Offering):
Common: 7,425,768 |
Series C Preferred: None |
Series D Preferred: 500,000 |
Series E Preferred: None |
Address:
5 Greenridge Road
Greenwood Village, CO 80111
Email: gaznichol@gmail.com
[SIGNATURE PAGE TO VOTING AGREEMENT]