This Warrant has not been registered under the Securities Act of 1933, as
amended (the "1933 Act"). The Warrant has been acquired for investment purposes
only and not with a view to distribution or resale, and may not be sold,
transferred, made subject to a security interest, pledged, hypothecated or
otherwise disposed of unless and until registered under the 1933 Act, or an
opinion of counsel for the company is received that registration is not required
under such 1933 Act.
No.BW-1
COMMON STOCK PURCHASE WARRANT
THE RATTLESNAKE HOLDING COMPANY, INC.
(A Delaware Corporation)
As of June 28, 1998
This certifies that, for value received,
Commonwealth Associates, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
(the "Warrantholder") is entitled to purchase the Shares (as defined below)
from THE RATTLESNAKE HOLDING COMPANY, INC., a Delaware corporation (the
"Company"), at any time after 9:00 A.M., New York time, on June 1, 1998 and
ending on May 31, 2003 (the "Exercise Period"). The Warrantholder is entitled
to purchase that number of whole shares ("Shares") of authorized but unissued
common stock of the Company, par value $.001 per share ("Common Stock") which is
computed by dividing the Warrant Amount by the Warrant Price (as such terms are
defined in Section 6). The Warrant Price is subject to adjustment from time to
time as set in Section 7.
This Warrant does not entitle the Warrantholder, as such, to any of the
rights of a stockholder of the Company.
SECTION 1. Transferability of Warrant.
1.1 Registration. This Warrant shall be numbered and shall be registered
on the books of the Company when issued.
1.2 Transfer. This Warrant shall be transferable only on the books of the
Company maintained at its principal office, upon surrender to the Company, at
its principal office of this Warrant, together with the transfer form annexed
hereto duly filled in and signed. Upon registration of transfer, the Company
shall issue a new Warrant of like tenor to the named transferee.
1.3 Limitations on Transfer of Warrant. This Warrant shall be transferred
only in compliance with applicable securities laws as applied by counsel to the
Company
1.4 Legend on Securities. Each certificate for securities issued upon
exercise of this Warrant shall bear appropriate restrictive legends thereon.
1.5 Registration. The Company covenants and agrees as follows. In the event
the Company shall at any time during the period of four (4) years from the date
hereof, seek to register any of its securities (on its behalf or on behalf of a
selling stockholder), under the Securities Act of 1933, as amended (the "Act"),
on each such occasion, it shall furnish each Holder of Warrants or person owning
Shares which are restricted securities with at least thirty (30) days' written
notice thereof and each Holder and person shall have the right, without cost or
expense, to include such Shares in such registration statement. The Holders
shall exercise the "piggy-back rights" by giving written notice to the Company
within twenty (20) days of receipt of the written notice from the Company. The
above is subject to the reasonable approval of any underwriter for the Company
involved with such registration statement.
SECTION 2. Exercise of Warrants.
2.1 Payment. Subject to the terms of this Warrant, the Warrantholder shall
have the right, at any time during the Exercise Period, to purchase from the
Company up to the number of whole Shares which the Warrantholder may at the time
be entitled to purchase pursuant to this Warrant, upon surrender to the Company,
at its principal office, of this Warrant, together with the exercise form
annexed hereto duly filled in and signed, and upon payment to the Company of the
Warrant Price (as defined in and determined in accordance with the provisions of
Sections 6 and 7 hereof), for the number of Shares in respect of which such
Warrant is then exercised. Payment of the aggregate Warrant Price shall be made
in cash or by certified or cashiers check payable to the Company.
2.2 Partial Exercise. If the Warrantholder does not fully exercise this
Warrant, then a Warrant of like tenor to this Warrant shall be issued to the
Warrantholder, except that the Warrant Amount set forth in the new Warrant shall
be reduced by the amount of the aggregate Warrant Price paid upon such partial
exercise.
2.3 Issuance of Shares. Upon such surrender of the Warrant and payment of
such Warrant Price as aforesaid, the Company shall issue and cause to be
delivered to the Warrantholder, within 10 days thereafter, a certificate or
certificates for the number of full Shares so purchased upon the exercise of the
Warrant issued in the name of the Warrantholder, together with cash in respect
of any fractional Shares as set forth herein. Such certificate or certificates
shall be deemed to have been issued and any person so designated to be named
therein shall be deemed to have become a holder of record of such Shares as of
the date of the surrender of the Warrant and payment of the Warrant Price, as
aforesaid, notwithstanding that the certificates representing the Shares shall
not actually have been delivered or that the stock transfer books of the Company
shall then be closed.
2.4 Fractional Share. If upon the conversion of all of the Warrant Amount,
the computation results in a fraction of a Share, such Fractional Share shall
not be issued, but the Company shall instead pay a sum in cash to the
Warrantholder equal to such fraction multiplied by the Current Market Price as
defined in Section 7.2.
SECTION 3. Payment of Taxes. The Company will pay all documentary stamp
taxes, if any, attributable to the issuance of the Shares, provided, however,
that the Company shall not be required to pay any tax or taxes which may be
payable in respect of any transfer of this Warrant or the Shares.
SECTION 4. Mutilated or Missing Warrant. In case this Warrant shall be
mutilated, lost, stolen or destroyed, the Company shall, at the request of the
Warrantholder, issue in exchange and substitution for, and upon cancellation of
the mutilated Warrant, or in lieu of and in substitution for the lost, stolen,
or destroyed Warrant, a new Warrant of like tenor, but only upon receipt of
evidence satisfactory to the Company of such loss, theft or destruction of such
Warrant and receipt of an indemnity agreement satisfactory in form and amount at
the Warrantholder's cost. Such Warrantholder shall also comply with such other
reasonable regulations and pay such other reasonable charges as the Company may
prescribe.
SECTION 5. Reservation of Common Stock. There has been reserved, and the
Company shall at all times keep reserved so long as any of the Warrants remain
outstanding, out of its authorized Common Stock, such number of shares of Common
Stock as shall be subject to purchase under the Warrants. Every transfer agent
for the Common Stock and other securities of the Company issuable upon the
exercise of the Warrants will be irrevocable authorized and directed at all
times to reserve such number of authorized shares and other securities as shall
be requisite for such purpose.
SECTION 6. Warrant Amount; Warrant Price.
(a) The term "Warrant Amount" shall mean $37,500
(b) The term "Warrant Price" shall mean five cents ($.05).
SECTION 7. Adjustment of Warrant Price.
7.1 Adjustment. The Warrant Price shall be subject to adjustment from time
to time as follows:
(i) If the Company shall at any time or from time to time after the date
hereof, issue any shares of Common Stock other than Excluded Stock (as
hereinafter defined) without consideration or for a consideration per share less
than the Warrant Price in effect immediately prior to the issuance of such
Common Stock ("Subject Issuance"), the Warrant Price in effect immediately prior
to each such issuance shall forthwith (except as provided in this clause (i)) be
adjusted to a price equal to the quotient obtained by dividing:
(A) an amount equal to the sum of
(x) the total number of shares of Common Stock outstanding (including any
shares of Common Stock deemed to have been issued pursuant to subdivision (3) of
this clause (i) and to clause (ii) below) multiplied by the Warrant Price in
effect immediately prior to such issuance, plus
(y) the consideration received by the Company upon the Subject Issuance,
by
(B) the total number of shares of Common Stock outstanding (including any
shares of Common Stock deemed to have been issued pursuant to subdivision (3) of
this clause (i) and to clause (ii) below) immediately after such issuance.
For the purposes of any adjustment of the Warrant Price pursuant to this
clause (i), the following provisions shall be applicable:
(1) In the case of the issuance of Common Stock for cash, the consideration
shall be deemed to be the amount of cash paid therefor after deducting therefrom
any discounts, commissions or other expenses allowed, paid or incurred by the
Company for any underwriting or otherwise in connection with the issuance of
sale thereof.
(2) In the case of the issuance of Common Stock for a consideration in
whole or in part other than cash, the consideration other than cash shall be
deemed to be the fair market value thereof as determined in good faith by the
Board of Directors, irrespective of any accounting treatment.
(3) In the case of the issuance of (x) options to purchase or rights to
subscribe for Common Stock, (y) securities by their terms convertible into or
exchangeable for Common Stock or (z) options to purchase or rights to subscribe
for such convertible or exchangeable securities:
(A) the aggregate maximum number of shares of Common Stock deliverable upon
exercise of such options to purchase or rights to subscribe for Common Stock
shall be deemed to have been issued at the time such options or rights were
issued and for a consideration equal to the consideration (determined in the
manner provided in subdivisions (1) and (2) above), if any, received by the
Company upon the issuance of such options or rights plus the minimum purchase
price provided in such options or rights for the Common Stock covered thereby;
(B) the aggregate maximum number of shares of Common Stock deliverable upon
conversion of or in exchange for any such convertible or exchangeable securities
or upon the exercise of options to purchase or rights to subscribe for such
convertible or exchangeable securities and subsequent conversion or exchange
thereof shall be deemed to have been issued at the time such securities were
issued or such options or rights were issued and for a consideration equal to
the consideration received by the Company for any such securities and related
options or rights (excluding any cash received on account of accrued interest or
accrued dividends), plus the additional consideration, if any, to be received by
the Company upon the conversion or exchange of such securities or the exercise
of any related options or rights (the consideration in each case to be
determined in the manner provided in subdivisions (1) and (2) above);
(C) on any change in the number of shares of Common Stock deliverable upon
exercise of any such options or rights or conversions of or exchange for such
convertible or exchangeable securities, other than a change resulting from the
antidilution provisions thereof, the Warrant Price shall forthwith be readjusted
to such Warrant Price as would have obtained had the adjustment made upon the
issuance of such options, rights or securities not converted prior to such
change or options or rights related to such securities not converted prior to
such change been made upon the basis of such change; and
(D) on the expiration of any such options or rights, the termination of any
such rights to convert or exchange or the expiration of any options or rights
related to such convertible or exchangeable securities, the Warrant Price shall
forthwith be readjusted to such Warrant Price as would have obtained had the
adjustment made upon the issuance of such options, rights, securities or options
or rights related to such securities been made upon the basis of the issuance of
only the number of shares of Common Stock actually issued upon exercise of such
options or rights, upon the conversion or exchange of such securities or upon
the exercise of the options or rights related to such securities and subsequent
conversion or exchange thereof.
(ii) "Excluded Stock" shall mean shares of Common Stock (1) issued as a
stock dividend payable in shares of Common Stock or upon any subdivision or
split-up of the outstanding shares of Common Stock; (2) issued upon exercise of
the Warrants; (3) issued upon exercise of stock options granted under the
Company's stock option plans, (4) issued in connection with the Xxxxxxxxxxx
merger transaction and the conversion of certain outstanding securities; (5)
issued upon exercise of all outstanding warrants and the conversion of all
outstanding convertible securities; (6) issued in connection with the Proposed
Private Placement and (7) which are issuable in connection with other employee
stock options or employee stock purchase rights approved by the Board of
Directors of the Company granted or issued by the Company subsequent to the date
hereof.
(iii) If, at any time after the date hereof, the number of shares of Common
Stock outstanding is increased by a stock dividend payable in shares of Common
Stock or by a subdivision or split-up of shares of Common Stock, then, following
the record date fixed for the determination of holders of Common Stock entitled
to receive such stock dividend, subdivision or split-up, the Warrant Price shall
be decreased by a percentage equal to the percentage increase in outstanding
shares of Common Stock.
(iv) If, at any time after the date hereof, the number of shares of Common
Stock outstanding is decreased by a combination of the outstanding shares of
Common Stock, then, following the record date for such combination, the Warrant
Price shall be increased by a percentage equal to the percentage decrease in
outstanding shares of Common Stock.
(v) If, at any time after the date hereof, the Company shall declare a cash
dividend upon its Common Stock payable otherwise than out of earnings or shall
distribute to holders of its Common Stock shares of its capital stock (other
than Common Stock), stock or other securities of other persons, evidences of
indebtedness issued by the Company or other persons, other assets or options or
rights (excluding options to purchase and rights to subscribe for Common Stock
or other securities of the Company convertible into or exchangeable for Common
Stock), then, in each such case, immediately following the record date fixed for
the determination of the holders of Common Stock entitled to receive such
dividend or distribution, the Warrant Price in effect thereafter shall be
determined by multiplying the Warrant Price in effect immediately prior to such
record date by a fraction of which the numerator shall be an amount equal to the
remainder of (x) the Current Market Price of one share of Common Stock less (y)
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive) of the stock, securities, evidences of
indebtedness, assets, options or rights so distributed in respect of one share
of Common Stock, and of which the denominator shall be such Current Market
Price. Such adjustment shall be made on the date such dividend or distribution
is made, and shall become effective at the opening of business on the next
business day following the record date for the determination of stockholders
entitled to such dividend or distribution.
(vi) If, at any time after the date hereof, there is any capital
reorganization, or any 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), or the consolidation or merger of the Company with or
into another person (other than a consolidation or merger in which the Company
is the continuing Company and which does not result in any change in the terms
of the Common Stock) or of the sale or other disposition of all or substantially
all the properties and assets of the Company as an entirety to any other person,
then after such reorganization, reclassification, consolidation, merger, sale or
other disposition, this Warrant shall be exercisable for the kind and number of
shares of stock or other securities or property of the Company or of the Company
resulting from such consolidation or surviving such merger or to which such
properties and assets shall have been sold or otherwise disposed, to which the
holder of the number of shares of Common Stock deliverable (immediately prior to
the time of such reorganization, reclassification, consolidation, merger, sale
or other disposition) upon such exercise would have been entitled upon such
reorganization, reclassification, consolidation, merger, sale or other
disposition. The provisions of this Section 7.1 (vi) shall similarly apply to
successive reorganizations, reclassifications, consolidations, mergers, sales or
other dispositions.
(vii) All calculations under this Section 7.1 shall be made to the nearest
one tenth (1/10) of a cent or to the nearest one tenth (1/10) of a share, as the
case may be.
7.2 Current Market Price. For the purpose of any computation pursuant to
this Section 7, the Current Market Price at any date of one share of Common
Stock shall be deemed to be the average of the daily closing prices for the 30
consecutive trading days ending no more than 15 days before the day in question
(as adjusted for any stock dividend, split-up, combination or reclassification
that took effect during such 30 trading day period). The closing price for each
day shall be the last reported sale price regular way or, in case no such
reported sale took place on such day, the average of the last reported bid and
asked prices regular way, in either case on the principal national securities
exchange on which the Common Stock is listed or admitted to trading (or if the
Common Stock is not at the time listed or admitted for trading on any such
exchange, then such price as shall be equal to the average of the last reported
bid and asked prices, as reported by the National Association of Securities
Dealers Automated Quotations System ("NASDAQ") on such day, or if, on any day in
question, the Common Stock shall not be quoted on the NASDAQ, then such price
shall be equal to the last reported bid and asked prices on such day as reported
by the National Quotation Bureau, Inc. or any similar reputable quotation and
reporting service, if such quotation is not reported by the National Quotation
Bureau, Inc.); provided, however, that if the Common Stock is not traded in such
manner that the quotations referred to in this Section 7.2 are available for the
period required hereunder, the Current Market Price shall be determined in good
faith by the Board of Directors of the Company, or if such determination cannot
be made, by a nationally recognized independent investment banking firm selected
by the Board of Directors.
7.3 Occurrence of Event. In any case in which the provisions of this
Section 7 shall require that an adjustment shall become effective immediately
after a record date for an event, the Company may defer until the occurrence of
such event (a) issuing to the Warrantholder who has exercised this Warrant after
such record date and before the occurrence of such event the additional shares
of capital stock issuable upon such conversion or exercise by reason of the
adjustment required by such event over and above the shares of capital stock
issuable upon such exercise before giving effect to such adjustment and (b)
paying to such holder any amount in cash in lieu of a fractional share of
capital stock provided, however, that the Company shall deliver to such holder a
due xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares, and such cash, upon the occurrence of the event
requiring such adjustment.
7.4 Filing of Statement re Adjustment. Whenever the Warrant Price shall be
adjusted as provided in this Section 7, the Company shall forthwith file, at the
office of the transfer agent for the Common Stock or at such other place as may
be designated by the Company, a statement, signed by its independent certified
public accountants, showing in detail the facts requiring such adjustment and
the Warrant Price that shall be in effect after such adjustment. The Company
shall also cause a copy of such statement to be sent by first-class certified
mail, return receipt requested, postage prepaid, to the Warrantholder at its or
his address appearing on the Company's records. Where appropriate, such copy
may be given in advance and may be included as part of a notice required to be
mailed under the provisions of Section 7.5.
7.5 Notice. In the event the Company shall propose to take any action of
the types described in clauses (i), (iii), (iv), (v) or (vi) of Section 7.1, the
Company shall give notice to the Warrantholder, which notice shall specify the
record date, if any, with respect to any such action and the date on which such
action is to take place. Such notice shall also set forth such facts with
respect thereto as shall be reasonably necessary to indicate the effect of such
action (to the extent such effect may be known at the date of such notice) on
the Warrant Price and the number, kind or class of shares of other securities or
property which shall be purchasable upon the occurrence of such action or
deliverable upon exercise of this Warrant. In the case of any action which
would require the fixing of a record date, such notice shall be given at least
20 days prior to the date so fixed, and in case of all other action, such notice
shall be given at least 30 days prior to the taking of such proposed action.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of any such action.
7.6 Fully Paid. All Shares which may be issued in connection with the
exercise of this Warrant will, up on issuance by the Company in accordance with
the terms of this Warrant, be validly issued, fully paid and nonassessable with
no personal liability attaching to the ownership thereof and free from all
taxes, liens or charges with respect thereto.
SECTION 8. Entire Agreement. This Warrant and the Purchase Agreement
contain the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior and contemporaneous arrangement or
understanding with respect thereto.
SECTION 9. Headings. The headings of the various sections of this Warrant
have been inserted for convenience of reference only and shall not be deemed to
be a part of this Warrant.
SECTION 10. Nouns and Pronouns. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of names and pronouns shall include the
plural and vice-versa.
SECTION 11. Governing Law. This Warrant shall be governed by and construed
in accordance with, (a) the laws of the State of New York applicable to
contracts made and to be performed wholly therein, and (b) the laws of the State
of Delaware applicable to corporations organized under the laws of such State.
IN WITNESS WHEREOF, the Company has duly executed this Agreement as of the
date first written above.
THE RATTLESNAKE HOLDING COMPANY, INC.
By_______________________________________
Authorized Signature
EXERCISE FORM
(to be signed only upon exercise of this Warrant)
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant for, and to purchase thereunder, _____________
shares of Common Stock (the "Purchased Shares"); and, if the Purchased Shares
shall not be all the Shares purchasable hereunder, then a new Warrant
certificate for the balance of the Warrant Amount shall be issued in the name of
the undersigned Warrantholder and delivered to the address stated below. This
Exercise Form is accompanied by cash or a certified or cashier's check payable
to The Rattlesnake Holding Company, Inc. in the amount of $___________________,
representing the aggregate Warrant Price of this exercise.
Dated: ______________________, 19___
Name of Warrantholder: ________________________________
(Please Print)
Address:_________________________________________________________
_________________________________________________________
Signature: ___________________________
Note: The above signature must correspond with the name as written upon the
face of this Warrant in every particular, without alteration or enlargement or
any change whatever and the signature must be guaranteed by a commercial bank or
securities broker having its principal place of business in the City, County and
State of New York.
ASSIGNMENT FORM
(To be signed only upon assignment of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto __________________________________________
_________________________________________________________________________
(Name and Address of Assignee must be printed or typewritten) the within
Warrant, hereby irrevocably constituting and appointing
_________________________________________________________________________
attorney to transfer said Warrant on the books of The Rattlesnake Holding
Company, Inc., with full power of substitution in the premises.
Dated:
______________________________
Signature of Warrantholder
_______________________________
Signature Guaranteed
Note: The above signature must correspond with the name as written upon the
face of this Warrant in every particular, without alteration or enlargement or
any change whatever and the signature must be guaranteed by a commercial bank or
securities broker having its principal place of business in the City, County and
State of New York.
