Exhibit 10.4

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF CERTAIN STATES AND MAY
NOT BE SOLD, TRANSFERRED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE DISTRIBUTED
FOR VALUE UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH
SECURITIES.

WARRANT
TO PURCHASE
SHARES OF COMMON STOCK
OF
DAKOTA PLAINS HOLDINGS, INC.

shares of Common Stock           , 20      

 

Dakota Plains Holdings, Inc., a Nevada corporation (the “Company”), hereby
agrees that, for value received,                  (the “Holder”) or its assigns,
is entitled, subject to the terms set forth below, to purchase from the Company
at any time or from time to time on or prior to          , 20 (the “Expiration
Date”), up to          shares of the Company’s common stock, par value $0.001
per share (the “Shares”), at a purchase price equal to $           per share.

This Warrant has been issued to                     as approved by the Company’s
Board of Directors.

1. Exercise of Warrant.

(a) No Vesting. The rights represented by this Warrant are immediately
exercisable.

(b) Cashless Conversion Option. In lieu of the payment of cash for the exercise
of this Warrant, the Holder shall have the right (but not the obligation), to
require the Company to convert this Warrant into Shares on a “cashless basis” as
provided for in this Subsection 1(b) (the “Conversion Right”). Upon exercise of
the Conversion Right, the Company shall deliver to Holder (without payment by
the Holder of any cash) that number of Shares (the “Conversion Shares”) equal to
the quotient obtained by dividing (x) the value of this Warrant at the time the
Conversion Right is exercised (determined by subtracting the aggregate Warrant
exercise price in effect immediately prior to the exercise of the Conversion
Right from the aggregate current market price of all of the Shares immediately
prior to the exercise of the Conversion Right) by (y) the current market price
of one (1) share of the Company’s common stock immediately prior to the exercise
of the Conversion Right. The current market price of the Company’s common stock
shall be the last sale price on such date as quoted on the principal securities
exchange, market, electronic communication network or other similar system
quoting bid, asked and/or sales prices for the Company’s common stock. If no
sale takes place on such day, the current market price of the Company’s common
stock shall be the average of the last reported closing bid and asked prices
quoted on such exchange, market, network or system. If there are no last
reported closing bid and asked prices, the current market price shall be the
price at which the Company most recently issued shares of its common stock for
consideration of any kind prior to the date of conversion under this Subsection
1(b). Any cashless conversion of this Warrant is intended to be a
recapitalization under Internal Revenue Code §368(a)(1)(E) and Treasury
Regulation (Reg.) 1.368-2(e) and a tax-free exchange under Internal Revenue Code
1036.

 

 

 

(c) Exercise Procedures. The party exercising this Warrant shall deliver
hand-written notice of any exercise to the Company (i) at least three (3) days
prior to the intended date of exercise in the case of an exercise for cash and
(ii) no later than the close of business on the intended date of conversion in
the case of a conversion of this Warrant under Subsection 1(b) above, and by the
surrender of this Warrant at the principal office of the Company and upon
payment (if applicable) to the Company of the purchase price for the Shares.
Certificates for the Shares so purchased, bearing the restrictive legend shall
be delivered to the address requested by the Holder within three (3) days after
the rights represented by this Warrant have been so exercised or converted, and,
unless this Warrant has expired, a new Warrant representing the number of
Shares, if any, with respect to which this Warrant has not been exercised or
converted shall also be delivered to the Holder within such time. No fractional
shares shall be issued upon the exercise or conversion of this Warrant.

(d) The Company covenants and agrees that all Shares that may be issued upon the
exercise or conversion of the rights represented by this Warrant shall, upon
issuance, be duly authorized and issued, fully paid and non-assessable shares of
common stock. The Company further covenants and agrees that during the period
within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized and reserved for the purposes of issue
or transfer upon exercise of the rights evidenced by this Warrant a sufficient
number of shares of common stock to provide for the exercise of the rights
represented by this Warrant. The Company may require that such certificate or
certificates contain on the face thereof a legend indicating that such shares
must be sold under appropriate federal and state laws.

2.    Adjustment of Purchase Price, Reorganization, etc. In the event the
Company shall at any time hereafter subdivide or combine its outstanding shares
of common stock, or declare a stock dividend, the exercise price and number of
Shares into which this Warrant may convert in effect immediately prior to the
subdivision, combination or dividend shall be adjusted to maintain the pro rata
amounts for this Warrant. In the event of any capital reorganization or any
reclassification of the shares of common stock of the Company, or in the case of
any consolidation with or merger of the Company into or with another
corporation, or the sale of all or a majority of its assets to another
corporation effected in such a manner that the holders of common stock shall be
entitled to receive stock, securities or assets with respect to or in exchange
for common stock, then, as a part of such reorganization, reclassification,
consolidation, merger or sale, as the case may be, lawful provision shall be
made so that the Holder of the Warrant shall have the right thereafter to
receive, upon the exercise hereof, the kind and amount of stock, securities or
assets which the Holder would have been entitled to receive if, immediately
prior to such reorganization, reclassification, consolidation, merger or sale,
the Holder had held the number of Shares which were purchasable upon the
exercise of the Warrant. In any such event, an appropriate adjustment (as
determined in good faith by the Board of Directors of the Company) shall be made
in the application of the provisions set forth herein with respect to the rights
and interest thereafter of the Holder of the Warrant, such that the provisions
set forth herein (including provisions with respect to adjustments of the
exercise price) shall thereafter be applicable, as nearly as reasonably may be,
in relation to any shares of stock or other property thereafter deliverable upon
the exercise of the Warrant.

[3.    Piggyback Registration Right.

(a) Whenever the Company proposes to register any shares of its common stock
under the Securities Act of 1933, as amended (the “Securities Act”) (other than
a registration effected solely to implement an employee benefit plan or a
transaction to which Rule 145 of the Securities Act is applicable, or
a registration statement on Form S-4, S-8 or any successor form thereto or
another form not available for registering the Shares for sale to the public),
whether for its own account or for the account of one or more shareholders of
the Company, and the form of registration statement to be used may be used for
any registration of the Shares (a “Piggyback Registration”), the Company shall
give prompt written notice to the Holder of its intention to effect such
a registration and, subject to Subsections 3(b) and 3(c) below, shall include in
such registration all Shares with respect to which the Company has received a
written request for inclusion from the Holder promptly after the Company’s
notice has been given to the Holder. The Company may postpone or withdraw the
filing or the effectiveness of a Piggyback Registration at any time in its sole
discretion.

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(b)  If a Piggyback Registration is initiated as a primary underwritten offering
on behalf of the Company and the managing underwriter advises the Company and
the Holder (if the Holder has elected to include Shares in
such Piggyback Registration) in writing that in its opinion the number of shares
of common stock proposed to be included in such registration, including all
Shares and all other shares of common stock proposed to be included in such
underwritten offering, exceeds the number of shares of common stock which can be
sold in such offering or that the number of shares of common stock proposed to
be included in any such registration would adversely affect the price per share
of the common stock to be sold in such offering, the Company shall include in
such registration (i) first, the number of shares of common stock that the
Company proposes to sell; (ii) second, the number of Shares requested to be
included therein by the Holder; and (iii) third, the number of shares of common
stock requested to be included therein by holders of common stock other than the
Holder, allocated among such holders in such manner as they may agree.

(c)  If a Piggyback Registration is initiated as an underwritten offering on
behalf of a holder of common stock other than the Holder, and the managing
underwriter advises the Company in writing that in its opinion the number of
shares of common stock proposed to be included in such registration, including
all Shares and all other shares of common stock proposed to be included in such
underwritten offering, exceeds the number of shares of common stock which can be
sold in such offering or that the number of shares of common stock proposed to
be included in any such registration would adversely affect the price per share
of the common stock to be sold in such offering, the Company shall include in
such registration (i) first, the number of shares of common stock and the number
of Shares requested to be included therein by the holder(s) requesting
such registration and by the Holder, allocated pro rata among such holders on
the basis of the number of shares of common stock (on a fully diluted, as
converted basis) and the number of Shares, as applicable, owned by the Holder or
in such manner as they may otherwise agree; and (ii) second, the number of
shares of common stock requested to be included therein by other holders of
common stock, allocated among such holders in such manner as they may agree.

(d)  If any Piggyback Registration is initiated as a primary underwritten
offering on behalf of the Company, the Company shall select the investment
banking firm or firms to act as the managing underwriter or underwriters in
connection with such offering.]

[4.]    Transferability. This Warrant and all rights hereunder are
nontransferable without the Company’s express written consent, which consent may
not be unreasonably withheld.

[5.]    Voting. This Warrant shall not entitle the Holder hereof through the use
of this Warrant to any voting rights or other rights as a shareholder of the
Company.

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[6.]    Reservation of Common Stock. A number of shares of common stock
sufficient to provide for the exercise of this Warrant upon the basis herein set
forth shall at all times be reserved for the exercise thereof.

[7.]    Miscellaneous. The Company will not by amendment of its Articles of
Incorporation or through reorganization, consolidation, merger, dissolution or
sale, or by any other voluntary act or deed, avoid or seek to avoid the
observance or performance of any of the conditions to be observed or performed
hereunder by the Company, but will at all times in good faith assist, insofar as
it is able, in the carrying out of all provisions hereof and in the taking of
all other action which may be necessary in order to protect the rights of the
Holder hereof.

The representations, warranties and agreements herein contained shall survive
the exercise of this Warrant. All shares of common stock or other securities
issued upon the exercise of the Warrant shall be validly issued, fully paid and
non-assessable.

IN WITNESS WHEREOF, this Warrant has been duly executed by the undersigned, as
of the            day of           , 20    .

 

  DAKOTA PLAINS HOLDINGS, INC.               By     Its  

 

 

 

 

 

 

 

 

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WARRANT EXERCISE

(To be signed upon exercise of Warrant)

The undersigned, the holder of the foregoing Warrant, hereby irrevocably elects
to exercise the purchase right represented by such Warrant for, and to purchase
thereunder _____________ shares of common stock of Dakota Plains Holdings, Inc.,
to which such Warrant relates and herewith makes payment of $____________
therefore in cash or by certified check and requests that the certificate for
such share be issued in the name of, and be delivered to ____________, whose
address is set forth below the signature of the undersigned.

Dated: __________________, 20______     (Entity Name)           (Signature)    
      (Print Name)           (Print Title)                           (Address)  
        (Tax Identification No.)

 

Accepted this _____ day of _________________, 20______

DAKOTA PLAINS HOLDINGS, INC.

  By   Its