EXHIBIT 4.9
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK
ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO XXXXXX
CAPITAL FINANCIAL GROUP, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.
Right to Purchase up to 793,000 Shares of Common Stock of Xxxxxx
Capital Financial Group, Inc.
(subject to adjustment as provided herein)
COMMON STOCK PURCHASE WARRANT
No. 001 Issue Date: As of November 1, 2004
XXXXXX CAPITAL FINANCIAL GROUP, INC., a corporation organized under the
laws of the State of Delaware ("DCFG"), hereby certifies that, for value
received, Xxxxxxx X. Xxxxxxxxx, or permitted assigns (the "Holder"), is
entitled, subject to the terms set forth below, including, without limitation,
the vesting provisions hereof, to purchase from the Company (as defined herein)
from and after the Issue Date of this Warrant and at any time or from time to
time before 5:00 p.m., New York time, through the close of business October 31,
2009 (the "Expiration Date"), up to Seven Hundred Ninety-Three Thousand
(793,000) fully paid and nonassessable shares of Common Stock (as hereinafter
defined), $0.001 par value per share, at the applicable Exercise Price per share
(as defined below). The number and character of such shares of Common Stock and
the applicable Exercise Price per share are subject to adjustment as provided
herein.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include DCFG and any corporation which
shall succeed, or assume the obligations of, DCFG hereunder.
(b) The term "Common Stock" includes (i) the Company's Common Stock,
par value $0.001 per share; and (ii) any other securities into which or
for which any of the securities described in the preceding clause may be
converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
(c) The term "Other Securities" refers to any stock (other than
Common Stock) and other securities of the Company or any other Person (as
hereinafter defined) which the holder of the Warrant at any time shall be
entitled to receive, or shall have received, on the exercise of the
Warrant, in lieu of or in addition to Common Stock, or which at any time
shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section 4 or
otherwise.
B-1
(d) The "Exercise Price" applicable under this Warrant shall be
One-Sixth of One Dollar ($0.1666...) per share, subject to adjustment as
herein provided.
1. Exercise of Warrant.
1.1 Number of Shares Issuable upon Exercise. From and after the date
hereof through and including the Expiration Date, the Holder shall
be entitled to receive, upon exercise of this Warrant in whole or in
part, by delivery of an original or fax copy of an exercise notice
in the form attached hereto as Exhibit A (the "Exercise Notice"),
shares of Common Stock of the Company, subject to adjustment
pursuant to Section 4.
1.2 Fair Market Value. For purposes hereof, the "Fair Market Value" of a
share of Common Stock as of a particular date (the "Determination
Date") shall mean:
(a) If the Company's Common Stock is traded on the American Stock
Exchange or another national exchange or is quoted on the National or
SmallCap Market of The Nasdaq Stock Market, Inc. ("Nasdaq"), then the
closing or last sale price, respectively, reported for the last business
day immediately preceding the Determination Date.
(b) If the Company's Common Stock is not traded on the American
Stock Exchange or another national exchange or on the Nasdaq but is traded
over the counter, then the mean of the average of the closing bid and
asked prices reported for the last business day immediately preceding the
Determination Date.
(c) Except as provided in clause (d) below, if the Company's Common
Stock is not publicly traded, then as the Holder and the Company agree or
in the absence of agreement by arbitration in accordance with the rules
then in effect of the American Arbitration Association, before a single
arbitrator to be chosen by the Holder and the Company from a panel of
persons qualified by education and training to pass on the matter to be
decided.
(d) If the Determination Date is the date of a liquidation,
dissolution or winding up, or any event deemed to be a liquidation,
dissolution or winding up pursuant to the Company's charter, then all
amounts to be payable per share to holders of the Common Stock pursuant to
the charter in the event of such liquidation, dissolution or winding up,
plus all other amounts to be payable per share in respect of the Common
Stock in liquidation under the charter, assuming for the purposes of this
clause (d) that all of the shares of Common Stock then issuable upon
exercise of the Warrant are outstanding at the Determination Date.
1.3 Company Acknowledgment. The Company will, at the time of the
exercise of the Warrant, upon the request of the holder hereof
acknowledge in writing its continuing obligation to afford to such
holder any rights to which such holder shall continue to be entitled
after such exercise in accordance with the provisions of this
Warrant. If the holder shall fail to make any such request, such
failure shall not affect the continuing obligation of the Company to
afford to such holder any such rights.
1.4 Trustee for Warrant Holders. In the event that a bank or trust
company shall have been appointed as trustee for the holders of the
Warrant pursuant to Subsection 3.2, such bank or trust company shall
have all the powers and duties of a warrant
agent (as hereinafter described) and shall accept, in its own name
for the account of the Company or such successor Person as may be
entitled thereto, all amounts otherwise payable to the Company or
such successor, as the case may be, on exercise of this Warrant
pursuant to this Section 1.
1.5 Vesting. The Warrant shall vest in twelve (12) equal monthly
installments commencing December 1, 2004 or, if sooner, upon a
Change of Control (as defined below) of the Company on or after
December 23, 2004. Upon the termination of Executive's employment
with the Company and its affiliates, (a) any unvested portion of the
Warrant shall automatically become null and void and shall terminate
and (b) any vested and unexercised portion of the Warrant shall be
exercisable for a period ninety (90) days following the date of such
termination of employment.
For purposes of this Section 1.5, "Change of Control" shall mean (i)
an acquisition of voting securities of the Company by any "person"
(as the term "person" is used for purposes of Section 13(d) or
Section 14(d) of the Securities Exchange Act of 1934, as amended
(the "1934 Act") (a "Person") immediately after which such Person
has "beneficial ownership" (within the meaning of Rule 13d-3
promulgated under the 0000 Xxx) of 50% or more of the combined
voting power of the Company's then-outstanding voting securities; or
(ii) a merger or consolidation that results in more than 50% of the
combined voting power of the Company's then-outstanding voting
securities changing ownership; or (iii) the sale of all or
substantially all of the Company's assets.
2. Procedure for Exercise.
2.1 Delivery of Stock Certificates, Etc., on Exercise. The Company
agrees that the shares of Common Stock purchased upon exercise of
this Warrant shall be deemed to be issued to the Holder as the
record owner of such shares as of the close of business on the date
on which this Warrant shall have been surrendered and payment made
for such shares in accordance herewith. As soon as practicable after
the exercise of this Warrant in full or in part, and in any event
within three (3) business days thereafter, the Company at its
expense (including the payment by it of any applicable issue taxes)
will cause to be issued in the name of and delivered to the Holder,
or as such Holder (upon payment by such Holder of any applicable
transfer taxes) may direct in compliance with applicable securities
laws, a certificate or certificates for the number of duly and
validly issued, fully paid and nonassessable shares of Common Stock
(or Other Securities) to which such Holder shall be entitled on such
exercise, plus, in lieu of any fractional share to which such holder
would otherwise be entitled, cash equal to such fraction multiplied
by the then Fair Market Value of one full share, together with any
other stock or other securities and property (including cash, where
applicable) to which such Holder is entitled upon such exercise
pursuant to Section 1 or otherwise.
2.2 Exercise. Payment may be made either (i) in cash or by certified or
official bank check payable to the order of the Company equal to the
applicable aggregate Exercise Price, (ii) by delivery of the
Warrant, or shares of Common Stock and/or Common Stock receivable
upon exercise of the Warrant in accordance with the formula set
forth below in this Section 2.2, or (iii) by a combination of any of
the foregoing methods, for the number of shares of Common Stock
specified in such Exercise Notice (as such exercise number shall be
adjusted to reflect any
adjustment in the total number of shares of Common Stock issuable to
the Holder per the terms of this Warrant) and the Holder shall
thereupon be entitled to receive the number of duly authorized,
validly issued, fully-paid and non-assessable shares of Common Stock
(or Other Securities) determined as provided herein. Notwithstanding
any provisions herein to the contrary, if the Fair Market Value of
one share of Common Stock is greater than the Exercise Price (at the
date of calculation as set forth below), in lieu of exercising this
Warrant for cash, the Holder may elect to receive shares equal to
the value (as determined below) of this Warrant (or the portion
thereof being exercised) by surrender of this Warrant at the
principal office of the Company together with the properly endorsed
Exercise Notice in which event the Company shall issue to the Holder
a number of shares of Common Stock computed using the following
formula:
X=Y (A-B)
---------
A
Where X = the number of shares of Common Stock to be issued to the
Holder
Y = the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being
exercised, the portion of the Warrant being exercised (at the
date of such calculation)
A = the Fair Market Value of one share of the Company's Common
Stock (at the date of such calculation)
B = Exercise Price (as adjusted to the date of such calculation)
3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.
3.1 Reorganization, Consolidation, Merger, Etc. In case at any time or
from time to time, the Company shall (a) effect a reorganization,
(b) consolidate with or merge into any other person, or (c) transfer
or sell all or substantially all of its properties or assets to any
other Person under any plan or arrangement contemplating the
dissolution of the Company (other than as set forth below in Section
3.2), then, in each such case, as a condition to the consummation of
such a transaction, proper and adequate provision shall be made by
the Company whereby the Holder of this Warrant, on the exercise
hereof as provided in Section 1 at any time after the consummation
of such reorganization, consolidation or merger or the effective
date of such transfer or sale, as the case may be, shall receive, in
lieu of the Common Stock (or Other Securities) issuable on such
exercise prior to such consummation or such effective date, the
stock and other securities and property (including cash) to which
such Holder would have been entitled upon consummation of such
transaction or in connection with such dissolution, as the case may
be, if such Holder had so exercised this Warrant, immediately prior
thereto, all subject to further adjustment thereafter as provided in
Section 4. In addition, the successor or acquiring entity shall
expressly assume the due and punctual performance of each covenant,
agreement, obligation and condition of this Warrant to be performed
and observed by the Company and all obligations and liabilities
hereunder, including, but not limited to the provisions of Section 4
hereunder. Any such provision shall include provision for
adjustments equivalent in all respects to the adjustments contained
in Section 4 of this Warrant. The foregoing provisions of this
Section 3.1 similarly apply to successive
reorganizations, consolidations, mergers and/or transfer or sale of
properties or assets. Notice of any such event contemplated in this
Section 3.1 shall be mailed by certified mail to the Holder no less
than fifteen (15) days prior to such event. A sale of all or
substantially all of the Company's assets for a consideration
consisting primarily of securities shall be deemed a consolidation
or merger for the foregoing purposes.
3.2 Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties
or assets, the Company, concurrently with any distributions made to
holders of its Common Stock, shall at its expense deliver or cause
to be delivered to the Holder the stock and other securities and
property (including cash, where applicable) receivable by the Holder
of the Warrant pursuant to Section 3.1, or, if the Holder shall so
instruct the Company, to a bank or trust company specified by the
Holder and having its principal office in New York, New York as
trustee for the Holder of the Warrant (the "Trustee").
3.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer)
referred to in this Section 3, this Warrant shall continue in full
force and effect and the terms hereof shall be applicable to the
shares of stock and other securities and property receivable on the
exercise of this Warrant after the consummation of such
reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and
shall be binding upon the issuer of any such stock or other
securities, including, in the case of any such transfer, the Person
acquiring all or substantially all of the properties or assets of
the Company, whether or not such Person shall have expressly assumed
the terms of this Warrant. In the event this Warrant does not
continue in full force and effect after the consummation of the
transactions described in this Section 3, then the Company's
securities and property (including cash, where applicable)
receivable by the Holders of the Warrant will be delivered to Holder
or the Trustee as contemplated by Section 3.2.
4. Extraordinary Events Regarding Common Stock. In the event that the
Company shall (a) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock, or (c) combine its outstanding shares of the Common
Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Exercise Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then Exercise Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Exercise Price then in effect. The
Exercise Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 4.
The number of shares of Common Stock that the holder of this Warrant shall
thereafter, on the exercise hereof as provided in Section 1, be entitled to
receive shall be increased to a number determined by multiplying the number of
shares of Common Stock that would otherwise (but for the provisions of this
Section 4) be issuable on such exercise by a fraction of which (a) the numerator
is the Exercise Price that would otherwise (but for the provisions of this
Section 4) be in effect, and (b) the denominator is the Exercise Price in effect
on the date of such exercise.
5. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrant, the Company at its expense will promptly cause its
certified public accountants or other appropriate designee to compute such
adjustment or readjustment in accordance with the terms of the Warrant and
prepare a certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based,
including a statement of (a) the consideration received or receivable by the
Company for any additional shares of Common Stock (or Other Securities) issued
or sold or deemed to have been issued or sold, (b) the number of shares of
Common Stock (or Other Securities) outstanding or deemed to be outstanding, and
(c) the Exercise Price and the number of shares of Common Stock to be received
upon exercise of this Warrant, in effect immediately prior to such adjustment or
readjustment and as adjusted or readjusted as provided in this Warrant. The
Company will forthwith mail a copy of each such certificate to the holder of the
Warrant and any Warrant agent of the Company (appointed pursuant to Section 9
hereof).
6. Reservation of Stock, Etc., Issuable on Exercise of Warrant. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrant, shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of the Warrant. If the
Company hereafter lists its Common Stock on any national securities exchange,
the Nasdaq National Market or the Nasdaq SmallCap Market, it shall similarly
list the Common Stock issuable upon exercise of this Warrant.
7. Assignment; Exchange of Warrant. Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a "Transferor") in whole or in
part. On the surrender for exchange of this Warrant, with the Transferor's
endorsement in the form of Exhibit B attached hereto (the "Transferor
Endorsement Form") and together with evidence reasonably satisfactory to the
Company demonstrating compliance with applicable securities laws, which shall
include, without limitation, the provision of a legal opinion from the
Transferor's counsel (at the Company's expense) that such transfer is exempt
from the registration requirements of applicable securities laws, and with
payment by the Transferor of any applicable transfer taxes) will issue and
deliver to or on the order of the Transferor thereof a new Warrant of like
tenor, in the name of the Transferor and/or the transferee(s) specified in such
Transferor Endorsement Form (each a "Transferee"), calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face or faces of the Warrant so surrendered by the Transferor.
8. Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
9. Warrant Agent. The Company may, by written notice to the each Holder of
the Warrant, appoint an agent for the purpose of issuing Common Stock (or Other
Securities) on the exercise of this Warrant pursuant to Section 1, exchanging
this Warrant pursuant to Section 7, and replacing this Warrant pursuant to
Section 8, or any of the foregoing, and thereafter any such issuance, exchange
or replacement, as the case may be, shall be made at such office by such agent.
10. Transfer on the Company's Books. Until this Warrant is transferred on
the books of the Company, the Company may treat the registered holder hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
11. Notices, Etc. All notices and other communications from the Company to
the Holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such Holder or, until any such Holder furnishes to the
Company an address, then to, and at the address of, the last Holder of this
Warrant who has so furnished an address to the Company.
12. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be governed by and construed in accordance with
the laws of State of New York without regard to principles of conflicts of laws.
Any action brought concerning the transactions contemplated by this Warrant
shall be brought only in the state courts of New York or in the federal courts
located in the state of New York; provided, however, that the Holder may choose
to waive this provision and bring an action outside the state of New York. The
individuals executing this Warrant on behalf of the Company agree to submit to
the jurisdiction of such courts and waive trial by jury. The prevailing party
shall be entitled to recover from the other party its reasonable attorney's fees
and costs. In the event that any provision of this Warrant is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of this Warrant.
The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision hereof. The Company acknowledges that
legal counsel participated in the preparation of this Warrant and, therefore,
stipulates that the rule of construction that ambiguities are to be resolved
against the drafting party shall not be applied in the interpretation of this
Warrant to favor any party against the other party.
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IN WITNESS WHEREOF, the Company has executed this Warrant as of the date
first written above.
XXXXXX CAPITAL FINANCIAL GROUP, INC.
By:
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Name:
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Title:
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